While ETFs could boost liquidity, SEC officials warn of risks, and critics caution about retail exposure and blurred investor protections.
Bloomberg’s senior exchange-traded fund (ETF) analyst Eric Balchunas has raised his odds for the approval of spot crypto ETFs tied to altcoins to 100%.
His assessment follows the US Securities and Exchange Commission’s (SEC) decision to eliminate the need for 19b-4 filings under newly adopted generic listing standards.
Asset managers have been pursuing altcoin ETFs after the successful launches of Bitcoin and Ethereum spot funds. A flurry of filings has targeted cryptocurrencies such as Solana (SOL), XRP (XRP), Cardano (ADA), Litecoin (LTC), Dogecoin (DOGE), and more.
Throughout 2025, the SEC delayed decisions on these proposals, extending deadlines multiple times. Yet, the regulator has also taken measures to streamline the process amid a more accommodating stance toward crypto.
BeInCrypto reported that the SEC approved generic listing standards for spot crypto ETFs on September 17, fueling optimism about the prospects of altcoin ETFs.
“We’re going to get well over a 100 ETFs probably that are going to be involved in the crypto space in the next six to 12 months,” Bloomberg’s ETF analyst James Seyffart said last week on a podcast.
In line with this, the SEC instructed issuers to withdraw their 19b-4 filings for LTC, XRP, SOL, ADA, and DOGE ETFs. Balchunas explained that the 19b-4 filings and their associated review deadlines have become irrelevant now.
The only remaining requirement is the approval of the S-1 registration statements, which detail the structure and operations of the ETFs. He also added that,
“Honestly, the odds are really 100% now.”
The new forecast comes after Bloomberg analysts had previously raised their approval odds for altcoin ETFs from 90% to 95%.
Despite the enthusiasm, concerns about market impacts persist. A user noted that while ETFs can bring growth and higher prices, they also create opportunities for insiders to cash out and risks for inexperienced retail investors.
Furthermore, in a recent statement, SEC Commissioner Caroline Crenshaw warned that these products are ‘nascent and untested’ and pose unique risks tied to the crypto spot markets.
Crenshaw also cautioned that the change further blurs the line between 33 Act ETPs and 40 Act ETFs, stressing that investors might mistakenly believe they enjoy protections that don’t exist.
“One need only look at the risk factors enumerated in the Form S-1 registration statements for digital asset ETPs to get a sense of the full slate of potential risks, including increased risk of loss and risks associated with the spot market not having comparable guardrails to those that exist in regulated securities markets,” she stated.
Lastly, Nate Geraci argued that the generic standards could undermine digital asset treasuries (DATs), which have benefited from regulatory arbitrage.
“Think it’s pretty much game over now, especially once staking in ETFs approved. Just buy the real thing or spot ETF,” Geraci remarked.
As potential new crypto ETFs enter the market, the balance between innovation and investor safeguards remains critical. Approvals could inject liquidity and broaden access, but also heighten risks in a volatile sector. Market participants await further SEC actions on pending filings.
