The U.S. Securities and Exchange Commission (SEC) is currently engaging in active discussions with major exchanges to develop a universal set of listing standards for digital token exchange-traded funds (ETFs). This initiative has the potential to dramatically reshape the landscape of the cryptocurrency ETF market, making it more accessible and efficient for both issuers and investors.
Under the proposed framework, the SEC is considering a streamlined approval process that would allow ETF issuers to bypass the traditionally slow and complex 19b-4 rule change filings. Instead, companies would be able to submit a standard S-1 registration statement. Following a mandatory 75-day review period, and provided that the underlying tokens meet specific liquidity, trading volume, and market capitalization criteria, the product could be launched to the public.
How a Universal Standard Would Change the Approval Process
The current process for approving new crypto ETFs, particularly those based on individual altcoins, has been widely criticized for its length and complexity. The 19b-4 process requires exchanges to formally propose a rule change to the SEC, a procedure that involves public comments and can take many months.
The universal standard model would represent a paradigm shift. By pre-defining the quantitative and qualitative requirements a digital asset must meet to be eligible for an ETF, the SEC can create a more predictable and transparent pathway. This would shift the regulatory focus from evaluating the asset itself for every single application to ensuring that the issuer's product complies with the pre-established, objective standards.
This efficiency is becoming increasingly critical. With over 70 ETF applications currently pending before the SEC and market interest continuing to surge, a streamlined approach is necessary to reduce bureaucratic bottlenecks. It would allow the regulator to better navigate the rapidly evolving digital asset landscape without compromising on investor protection.
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Grayscale's GDLC: The First Domino to Fall
The first concrete sign of this shifting regulatory attitude emerged on July 1st, 2025, when the SEC approved Grayscale's application to convert its Digital Large Cap Fund (GDLC) into a spot ETF.
This newly approved GDLC ETF will trade on the NYSE Arca exchange and hold a basket of leading cryptocurrencies, diversifying exposure for investors beyond a single asset. Its composition is expected to be:
- Bitcoin (BTC): ~80%
- Ethereum (ETH): ~11%
- XRP (XRP): ~5-6%
- Solana (SOL): ~2-3%
- Cardano (ADA): ~1%
This approval is significant as it sets a precedent for multi-asset cryptocurrency ETFs, demonstrating the SEC's willingness to greenlight products that hold a diversified portfolio of digital assets beyond just Bitcoin and Ethereum.
The Rising Tide of Altcoin ETF Applications
Buoyed by this progress, optimism around single-asset altcoin ETFs is building significant momentum. The SEC is now actively reviewing at least nine applications for Solana ETFs from major issuers including VanEck, 21Shares, Bitwise, and Canary Capital. Some of these proposed ETFs even include innovative features like staking mechanisms, which would allow the fund to generate yield for shareholders.
The regulatory process appears to be accelerating. Notably, the SEC recently requested that issuers submit amended S-1 forms within a one-week window, a clear signal that the approval pipeline is moving forward with increased urgency.
Analyst Outlook: High Probability of Approval
Market analysts have subsequently revised their forecasts, now believing that a first wave of altcoin ETF approvals could arrive as early as July 2025. Bloomberg Intelligence ETF analysts James Seyffart and Eric Balchunas have raised their odds of Solana and XRP ETF approvals by the end of the year to 90-95%.
Other cryptocurrencies like SUI and TRON are also in the running, though they are considered less likely candidates with estimated approval chances of 60% and 50%, respectively. The establishment of universal listing standards would effectively open the floodgates to a new wave of cryptocurrency ETFs, provided the assets meet the criteria.
The central question remains whether the SEC is fully prepared to handle the inevitable deluge of applications and if it can maintain rigorous quality control through a more streamlined, standardized process.
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Frequently Asked Questions
What are the SEC's proposed universal listing standards for crypto ETFs?
While the specific criteria are still under discussion, the proposed universal standards are expected to be a set of pre-defined rules that determine a cryptocurrency's eligibility for an ETF. These will likely be based on objective metrics like market capitalization, trading volume, and liquidity, creating a clearer and faster path to approval for compliant assets.
How would universal standards make the ETF approval process faster?
The new standards would allow issuers to skip the lengthy 19b-4 exchange rule change process. Instead, they would only need to file a standard S-1 registration statement. If the underlying token meets the pre-set standards, the approval process could be completed after a 75-day review period, significantly reducing time-to-market.
What was significant about the Grayscale GDLC ETF approval?
The approval of Grayscale's Digital Large Cap Fund (GDLC) as a spot ETF was groundbreaking because it was the first multi-cryptocurrency ETF approved by the SEC. It provides a model for future ETFs that hold a basket of digital assets, moving beyond single-asset products like Bitcoin or Ethereum ETFs.
Which altcoin ETFs are most likely to be approved next?
Based on analyst reports and ongoing SEC engagements, Solana (SOL) and XRP (XRP) ETFs are considered the most likely to be approved in the near future, with estimates placing the probability at over 90%. Other assets like SUI and TRON are also being considered but are seen as having lower odds.
What are the benefits of investing in a crypto ETF versus holding tokens directly?
Crypto ETFs offer several advantages, including exposure to crypto price movements without the technical complexities of owning and securing digital wallets. They are held in traditional brokerage accounts, provide enhanced regulatory oversight, and may offer features like staking yield. However, they also come with management fees not associated with direct ownership.
Could universal standards lead to too many crypto ETFs?
While universal standards would likely increase the number of crypto ETF offerings, the SEC's goal is to ensure that only assets with sufficient maturity, liquidity, and market depth are eligible. This built-in filtering mechanism is designed to maintain market quality and protect investors from potentially unstable or illiquid assets.