SEC Moves Have Crypto Enthusiasts Calling It a Change of Pace

Think back to early January 2024: the asset-management industry waited impatiently to see if the highly anticipated launch of US spot Bitcoin exchange-traded funds (ETFs) could meet the lofty predictions of potentially attracting $30 billion in their first year.

They are now popping open champagne bottles today.

Although Biden's crypto-sceptic US Securities and Exchange Commission (SEC) chief, Gary Gensler, was compelled to allow the first spot Bitcoin ETF and equivalent Ethereum products following a court challenge, he persisted in expressing concern about the extreme volatility and prevalence of scams and manipulation in the cryptocurrency market.

However, despite Gensler's warnings, in 2024, the initial influx of Bitcoin ETFs garnered an incredible $65 billion, contributing to the Bitcoin price surge from $43,000 to over $100,000.

The most substantial of these new offerings is BlackRock's among ETFs that have debuted in the past 35 years, iShares Bitcoin Trust has surpassed all others in terms of success.

The crypto community, however, thinks that's merely the beginning of the celebration.

Even though the SEC has not yet officially installed Donald Trump's nominee to replace Gary Gensler as chair, the agency is moving in the right direction toward approving several new Bitcoin ETFs.

Two papers from Thursday indicate that the SEC is looking for public feedback on the exchange-traded products Solana and Litecoin developed by Grayscale.

According to industry watchers, this is a positive development for the government, which had previously ignored applications for ETFs tracking the spot price of Solana, the third largest cryptocurrency by market cap.

Litecoin ETF number two was the subject of comment requests sent out by the SEC in January.

In the wake of Trump's victory, ETF issuers have been filing a deluge of paperwork with the SEC to introduce new products, including increasingly innovative cryptocurrency offerings.

The SEC is expected to be prompted to adopt a more accommodating stance toward the industry due to the president's apparent support for it.

Paul Atkins, Trump's candidate for the SEC chair, is still waiting to be confirmed by the Congress.

Atkins is widely seen as a supporter of digital assets.

From fully investing in a Trump memecoin to tracking tokens like Dogecoin, issuers have recently offered a wide range of products.

Six investment products, including three ETFs, with themes that closely mirror Trump's aims in office were trademarked earlier this week by Trump Media & Technology Group.

On Thursday, the regulator announced that it is also seeking public opinions on two Grayscale altcoin fund registrations and the possibility of in-kind creations and redemptions on BlackRock's iShares Bitcoin Trust ETF.

The latest actions taken by the agency do not constitute product approval, which may take several months.

Furthermore, the SEC has not explicitly stated which crypto assets included in previous filings constitute securities.

In its most recent Solana filing, the SEC is soliciting feedback on whether or whether the token should be treated as a commodity.

Crypto enthusiasts are predicting a new golden age for the digital asset class, and regulators' inboxes are already flooded with applications for new and, at times, innovative crypto products.

But the impending crypto ETF gold rush isn't simply about products linked to individual coins.

New derivative products are expected to be unveiled, and new types of multi-asset or hybrid products are also being developed.

According to TrackInsight, a Paris-based research firm, ETFs linked to ether, the world's second-largest cryptocurrency, have garnered $12.8 billion in investments despite outperforming bitcoin ETFs.

In 2024, the price of Bitcoin more than doubled, but the price of ether gained only 53%.

Futures trading in Ethereum and Bitcoin, as well as futures-based ETFs, has been available in the United States for a while, but those are the only cryptocurrencies for which such a market is now available.

Futures trading has instilled trust in the depth and breadth of Bitcoin and ether among authorities.

The rate of Atkins' adoption of the most innovative product proposal is uncertain, considering the hazards involved with the ongoing discussion over whether these tokens constitute securities subject to SEC regulation.

Despite this, the crypto asset-management business remains enthusiastic despite the lack of clarity surrounding regulations.

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