In brief
- Investment firms are filing a wave of sophisticated crypto ETF applications, including 21Shares’ active crypto fund and 2x leveraged Dogecoin and Sui products.
- Multiple XRP ETF issuers updated filings following SEC feedback, while regulators delaying decisions on Trump Media and Solana funds until October.
- Experts predict approval momentum to begin in October despite regulatory caution, warning that active and leveraged products pose higher risks for investors.
Investment firms have started flooding regulators with applications for sophisticated crypto exchange-traded funds, pivoting from basic spot products to leveraged and actively managed strategies for broader institutional crypto exposure.
Bloomberg ETF analyst Eric Balchunas pointed to the trend, tweeting Sunday, “New filings from 21Shares for an active crypto ETF (something I think we’ll see a ton of in the next 12 months) and a 2x Doge and 2x Sui.”
The filings show how issuers are trying to stay one step ahead of regulators while preparing for an October window that could see multiple approvals land at once.
Multiple issuers also updated XRP ETF applications, which are “almost certainly due to feedback from SEC. Good sign, but also mostly expected,” Bloomberg’s James Seyffart tweeted Saturday.
Industry experts widely agree with Balchunas’s assessment of the coming wave.
Charmaine Tam, head of OTC sales and trading at Hex Trust, told Decrypt that the approval of spot Bitcoin and Ethereum ETFs has “created regulatory precedent, giving issuers confidence to pursue more sophisticated offerings.”
“Active ETFs are a logical next step” for professional management, while “leveraged products serve clients seeking more aggressive exposure,” she said.
Bridget Nichols, chief commercial officer at Monochrome, told Decrypt that Balchunas “generally has his finger on the pulse of USA ETF and regulatory developments” and that his outlook “rings true in a fast-moving digital assets landscape.”
She explained actively managed crypto ETFs face the same issues as their traditional counterparts, noting “taking directional bets is a clear win/lose strategy,” and with Bitcoin’s volatility, passive funds often perform better over time.
“Passive ETFs generally perform better over most time horizons,” Nichols said, adding Bitcoin in particular has “a track record of being very hard to outperform.”
Any edge in crypto markets is “extremely rare,” she noted, typically stemming from early token investments that prove “unsustainable.”
ETFs all round
Recent reports revealed JPMorgan is exploring offering clients financing against crypto ETFs, which Tam called “a profound sign of mainstream acceptance” that introduces new capital efficiency for institutions.
Yet delays continue across multiple fronts, with the SEC pushing back decisions on Trump Media’s Bitcoin-Ethereum ETF until October 8, while extending deadlines for spot XRP funds from Grayscale, CoinShares, Canary Capital, Bitwise, and 21Shares.
Solana ETF decisions from Bitwise, 21Shares, VanEck, and others face delays until October 16, with regulators citing needs for “sufficient time to consider” the proposals.
Major issuers such as Invesco Galaxy, Ark 21Shares, and others recently filed amendments seeking in-kind redemptions for their Bitcoin and Ethereum ETFs, which Seyffart previously characterized as “positive signs” indicating “fine-tuning happening with the SEC.”
Balchunas recently told Decrypt the recent delays were “nothing significant” and predicted “a batch of approvals based on the listing standard starting in October.”
Peter Chung, head of research at Presto Labs, agreed with Balchunas’s timeline predictions while noting performance hurdles, telling Decrypt that “crypto or not, the challenge for any active ETFs is the managers’ ability to beat a benchmark.”
Crypto ETFs are “definitely more volatile,” he said, meaning retail investors must educate themselves, but ultimately the products are about “giving investors more choices.”
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Source: https://decrypt.co/336626/etf-filings-hint-broader-crypto-product-boom-ahead
