Crypto ETFs Face Inflow Challenges Despite Easier SEC Approvals
- Antwan Koss
- September 17, 2025
- Legal
- 0 Comments
The U.S. Securities and Exchange Commission is reportedly working on a new, more efficient approval process for crypto exchange-traded products. And while that could open the floodgates for a wave of new offerings, one industry insider is urging caution. It’s not as simple as just listing a fund and watching the money pour in.
Matt Hougan, the chief investment officer at Bitwise, pointed out that a streamlined system—potentially arriving by October—would likely lead to a surge in new crypto ETPs. He bases this on the history of other ETFs. But he’s quick to separate the logistics of a launch from the hype around the assets themselves.
Existence Doesn’t Equal Success
“The mere existence of a crypto ETP does not guarantee significant inflows,” Hougan stated plainly. “You need fundamental interest in the underlying asset.”
He’s pretty skeptical about the prospects for products based on less popular cryptocurrencies. Something like a Bitcoin Cash ETP, for instance, would probably struggle to attract investment unless the coin itself suddenly gained a lot of new traction with users. It’s a fair point. An ETF is just a wrapper; what’s inside still matters most.
A Question of Real Demand
This sentiment echoes what others have been wondering. Earlier this year, Sygnum’s head of research, Katalin Tischhauser, questioned where the substantial demand for all these new products would actually come from, calling the excitement “frothy.”
Yet, the launches continue. Just this week, new ETFs tracking XRP and Dogecoin are expected to hit the market. This follows the recent debut of the first U.S. Solana staking ETF, which pulled in a decent $12 million on its first day—a figure analysts called a “healthy start.”
The Mechanics of the New System
Right now, the SEC’s process is slow and unpredictable. Each spot crypto ETF application is reviewed individually, a drawn-out procedure that can take up to 240 days with no promise of a yes at the end.
The proposed change would create a clear set of rules. Hougan suggests that if an application meets those specific requirements, approval would be “virtually guaranteed,” and it would happen much faster—in 75 days or less. This shift would remove a huge amount of uncertainty for issuers.
But even with a smoother path to market, the real test comes after launch. As Bitfinex analysts noted, a broad altcoin rally might not happen until ETFs arrive that let investors cautiously dip further into riskier assets. It seems the market is waiting, but for what exactly is still a bit unclear.
