SEC reviews crypto ETF filings amid pro-crypto shift

The U.S. Securities and Exchange Commission (SEC) has acknowledged multiple filings related to cryptocurrency exchange-traded funds (ETFs), signaling a potential shift in its stance on crypto assets.

These filings, submitted by Nasdaq ISE and Cboe BZX, propose rule changes for crypto ETFs, including those concerning staking, options, in-kind redemptions, and new altcoin funds.

The SEC's acknowledgments reflect a potentially more favorable regulatory environment for crypto since President Donald Trump's second term began in January 2025.

This shift has led to the launch of two crypto index ETFs in February, with analysts anticipating further ETF approvals in 2025.  

Nasdaq's filing focuses on position and exercise limits on options tied to BlackRock’s iShares Bitcoin Trust (IBIT), which holds nearly $57 billion in net assets.

Cboe has filed to list options on Grayscale’s and Bitwise’s Ether (CRYPTO:ETH) ETFs, while the SEC has already approved options on Bitcoin (CRYPTO:BTC) ETFs.

Cboe has also requested permission to list proposed XRP ETFs from Canary and WisdomTree, support in-kind creations and redemptions for Fidelity’s Bitcoin and ETH ETFs, and allow 21Shares’ Ether ETF to stake a portion of its ETH holdings for additional yield.

Fox Business reporter Eleanor Terrett noted that the SEC is reportedly "very, very interested" in staking and has requested a memo reviewing different staking types and their potential benefits.

Bloomberg Intelligence analysts estimate a 65% chance of XRP (CRYPTO:XRP) ETF approval, with higher odds for Litecoin (CRYPTO:LTC) (90%) and Solana (CRYPTO:SOL) (70%).

The SEC acknowledged Cboe’s request to list 21Shares’ XRP ETF on February 14.

Several companies have submitted applications for XRP ETFs, indicating growing institutional interest in cryptocurrency investment vehicles.

The SEC accepted 21Shares' application on February 14, followed by Bitwise's filing on February 18.

The agency's formal assessment process includes a 21-day period for public feedback on the proposals.

The SEC's stance on XRP has evolved following its legal battle with Ripple Labs.

A federal judge ruled in August 2024 that XRP is not a security, although it could be under specific conditions.

The SEC's recent filing characterises XRP as a commodity, aligning it with Bitcoin and Ethereum.

Bitwise's application emphasises its lack of direct connections to Ripple Labs and argues that XRP does not meet the requirements to be deemed a security.

Market analysts suggest a 65% chance of approval, while the prediction market Polymarket has placed the likelihood at 78%.

The overall crypto ETF market is expanding, with issuers exploring new strategies such as staking and in-kind redemptions.

On February 14, Nasdaq launched the Hashdex Nasdaq Crypto U.S. ETF, the first spot crypto index fund available in the U.S.