James Seyffart, an analyst at Bloomberg, has outlined possible timelines for the approval of cryptocurrency exchange-traded funds (ETFs) that include assets like Solana, XRP, Litecoin, and Hedera. With increasing regulatory scrutiny in the U.S., Seyffart suggests that these approvals could be delayed until late 2025.
What Hurdles Do Crypto ETFs Face?
Seyffart highlighted the complexities surrounding the approval of altcoin ETFs, attributing challenges to prior decisions made by the Securities and Exchange Commission (SEC). He explained that while Bitcoin and Ethereum ETFs are tied to regulated futures markets, many altcoins, such as SOL and XRP, lack these vital markets, complicating their evaluation.
“Without a significant regulated market, the SEC has historically rejected altcoin ETF applications,” – Seyffart.
Despite attempts from firms like WisdomTree and 21Shares to introduce XRP ETFs, Seyffart pointed out that existing regulations pose barriers to these offerings. Key concerns include market manipulation, custody, and compliance with SEC standards.
Could Multi-Index ETFs Provide a Solution?
Seyffart also discussed the potential for multi-index ETFs that encompass Bitcoin, Ethereum, and other cryptocurrencies. Products like Grayscale’s GDLC and Bitwise’s Crypto 10 Index may face fewer regulatory obstacles due to their heavy investments in Bitcoin and Ethereum.
– Approval timelines for crypto ETFs are uncertain, possibly extending to late 2025.
– SEC’s historical reluctance to approve altcoin ETFs is rooted in the lack of regulated futures markets.
– Regulatory compliance and market manipulation remain significant concerns.
– Multi-index ETFs may offer a path forward, less affected by current regulations.
Seyffart remains cautiously optimistic about a shift in the SEC’s approach under new leadership, though he acknowledges that certainty in this area is lacking.
