The U.S. Securities and Exchange Commission (SEC) is projected to approve a wave of cryptocurrency exchange-traded funds (ETFs), according to Bloomberg analysts Eric Balchunas and James Seyffart. The experts foresee the SEC adopting a phased approach to these approvals, starting with a Bitcoin and Ethereum combo ETF.
We expect a wave of cryptocurrency ETFs next year, albeit not all at once. First out is likely the btc + eth combo ETFs, then prob Litecoin (bc its fork of btc = commodity), then HBAR (bc not labeled security) and then XRP/Solana (which have been labeled securities in pending… pic.twitter.com/29vMdciZxE
— Eric Balchunas (@EricBalchunas) December 17, 2024
Bitcoin and Ethereum Combo ETF on the Horizon
Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization, are expected to spearhead this new wave. Leading asset managers, including Bitwise, Hashdex, and Franklin Templeton, have already filed applications for Bitcoin-Ethereum ETFs. This move builds on the SEC’s previous approvals of individual Bitcoin and Ethereum ETFs earlier this year. While Bitcoin ETFs launched in January, Ethereum ETFs began trading in July, signaling the regulator’s cautious yet progressive approach to cryptocurrency investment vehicles.
Litecoin and Hedera ETFs Likely to Follow
Following the anticipated Bitcoin-Ethereum ETF, Bloomberg’s analysts predict the approval of ETFs tied to Litecoin (LTC) and Hedera Hashgraph (HBAR). Litecoin, a fork of Bitcoin, could benefit from its commodity classification, reducing regulatory hurdles. Similarly, HBAR may gain approval due to its lack of designation as a security by the SEC. Currently, Canary Capital is the sole entity seeking regulatory approval for both LTC and HBAR ETFs.
Challenges for XRP and Solana ETFs
However, ETFs based on XRP and Solana (SOL) are expected to face delays. Both cryptocurrencies are entangled in legal battles with the SEC, where they have been labeled as securities. This regulatory uncertainty has already led the SEC to reject two out of five recent SOL ETF applications. Bloomberg experts suggest that a change in SEC leadership could pave the way for the approval of joint XRP-SOL ETFs in the future.
Optimism Under New Administration
The upcoming U.S. administration, led by President-elect Donald Trump, has raised hopes among crypto enthusiasts. Trump’s pro-crypto stance is reflected in his nomination of industry advocates like Paul Atkins for SEC Chair and David Sacks as Crypto Czar. Their leadership could signal a more favorable regulatory environment for crypto ETFs, potentially accelerating their approval and market adoption.
Also Read: Solana ETF Rejections – Bloomberg Analyst Eyes Approval Shift Under New SEC Chair
As the SEC’s phased approach unfolds, the cryptocurrency industry watches closely, optimistic about a more inclusive financial future.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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