Crypto Market Awaits SEC Decision On Altcoin ETFs

By: Isha Das

The crypto market finds itself in a state of anticipation as industry titans Fidelity Investments and Canary Capital are moving forward in their pursuit to launch altcoin-focused exchange-traded funds (ETFs) in the United States. On September 11, the Depository Trust & Clearing Corporation (DTCC), a key financial market intermediary, quietly added three proposed spot ETFs to its platform. These include Fidelity's Solana ETF (FSOL) alongside Canary's Hedera (HBAR) and XRP (XRPC) ETFs. While this listing does not equal regulatory approval, it marks a critical step in the preparatory process that issuers must undertake prior to a potential market debut. This move has intrigued the crypto community, seeing it as a potential harbinger for these funds entering the market once the U.S. Securities and Exchange Commission (SEC) grants the requisite approvals.

The significance of these listings was highlighted by Bloomberg ETF analyst Eric Balchunas, stressing that it is uncommon for tickers to be integrated into the DTCC system without eventually being launched on the market. As a result, this procedural development poured over into the trading activities, with Solana experiencing a notable surge of more than 6% in just 24 hours, outpacing XRP and HBAR, which each saw approximately 2% gains.

Currently, the SEC's position on altcoin ETFs remains cautious, with recent delays on multiple applications keeping the market on edge. On September 10, the SEC postponed three major applications involving Ethereum staking and spot funds for Solana and XRP. This postponement extends the broader review process as the regulatory body strives to establish a streamlined framework for future approvals. The SEC is likely to bundle these decisions in October, echoing past cycles where numerous rulings coincided during the same period. This step is essential given the substantial demand, illustrated by the 92 crypto-linked ETF proposals currently under consideration by the agency.

Meanwhile, financial giants such as BlackRock have also signaled interest in the crypto market dynamics with their plans to tokenize ETFs, encompassing major cryptocurrencies like Ethereum. Such initiatives, contingent upon obtaining regulatory clearances, are likely to shift the landscape for crypto leaders, prompting closer scrutiny of their potential impacts on the market. As the SEC deliberates, the market braces for potential breakthroughs that could significantly reshape investment opportunities within the crypto sphere.