Nikolas Sargeant
In a landmark decision, the U.S. Securities and Exchange Commission (SEC) has granted accelerated approval to NYSE Arca's proposal for listing Bitwise's innovative joint Bitcoin and Ethereum ETF. This development follows NYSE's submission of the crucial 19b-4 form in November 2024, marking a significant milestone in the evolution of cryptocurrency investment vehicles.
SEC's Expedited Review Process Marks Shift in Crypto ETF Landscape
The Commission's swift response represents a notable departure from traditional review timelines, with the approval process completed in just 45 days instead of the typical 240-day period. In their official statement, the SEC emphasized that the proposal demonstrated robust compliance with Exchange Act requirements, particularly highlighting its alignment with mechanisms designed to prevent "fraudulent and manipulative acts and practices."
This approval joins a growing roster of similar products recently greenlit by the SEC, including offerings from Hashdex and Franklin Templeton. Both these funds provide direct exposure to spot Bitcoin and Ethereum markets, with Hashdex's Crypto Index ETF offering additional cryptocurrency diversification and Franklin's product tracking the specialized Institutional Digital Asset Index.
Market Implications and Industry Expert Reactions
Industry analysts and experts have responded positively to the accelerated approval process. Bloomberg senior analyst Eric Balchunas noted the significance of the expedited timeline, though cautioning against drawing broader conclusions about the SEC's future approach. "Even Gensler's SEC would approve these," Balchunas stated, while acknowledging the notably faster processing time.
James Toledano, Chief Operating Officer at Unity Wallet, offered insights into the broader implications for alternative cryptocurrency investments: "Altcoin ETFs have genuine potential to attract capital, especially if supported by innovation-friendly policies with the new U.S. administration." However, he tempered expectations by noting that success rates might vary compared to Bitcoin ETFs due to the "seemingly episodic nature of interest in altcoins."
Future Outlook for Alternative Cryptocurrency ETFs
The approval has catalyzed a surge in new cryptocurrency ETF applications, with various asset managers now pursuing products tracking alternative cryptocurrencies like Dogecoin and Litecoin. Bitwise itself has recently filed for a Dogecoin ETF in Delaware, indicating growing confidence in the expanded cryptocurrency ETF landscape.
While the SEC's accelerated approval marks a significant milestone, it's important to note that final trading authorization still requires clearance of the pending S-1 registration. Both the 19b-4 form and S-1 registration approvals must be secured before trading can commence on the exchange.
The streamlined approval process has generated optimism about future cryptocurrency ETF applications, with analysts like Balchunas suggesting that Litecoin-based products might be next in line for regulatory review. This development potentially signals a more efficient approval pathway for future cryptocurrency investment products, though market observers remain cautious about drawing definitive conclusions about long-term regulatory trends.
