The decision date "invalidated" after the new SEC regulations: which of the five candidates will pass the October encryption ETF?

Author: Felix, PANews

Among the many catalysts in this round of the cryptocurrency bull market, ETFs, especially spot Bitcoin and Ethereum ETFs, have played a key role as a revolutionary financial instrument that significantly lowers the barrier to investing in cryptocurrencies, acting as a crucial "funding bridge." Since the approval of the Bitcoin spot ETF at the beginning of 2024, the entire industry has attracted a cumulative inflow of hundreds of billions of dollars in institutional funds, driving the price of Bitcoin from $60,000 to the current approximately $113,500.

As of now, the U.S. Securities and Exchange Commission (SEC) has 92 cryptocurrency spot ETFs (including single asset and index-based) pending approval. Among these, approximately 69 are single asset ETFs covering 24 different cryptocurrencies. These applications mainly come from institutions like Grayscale and VanEck, with most final decision deadlines in October.

Against this backdrop, the U.S. Securities and Exchange Commission (SEC) recently approved a proposal that fundamentally changes the listing method for cryptocurrency spot ETFs. Therefore, the approval situation in October will not only become a turning point for the cryptocurrency ETF wave, but it will also reflect the future direction of this bull market.

The U.S. SEC has approved a change proposal from "case-by-case approval" to "standard clearance".

On September 7, the U.S. SEC approved rule changes proposed by three major exchanges (Nasdaq, Cboe BZX, and NYSE Arca) to introduce a universal listing standard for "Commodity-Based Trust Shares." This standard primarily targets exchange-traded products (ETPs) that hold physical commodities (including digital assets), replacing the cumbersome case-by-case review process, with the aim of streamlining the listing process.

The chairman of the US SEC stated that these changes mark a shift in the SEC's regulation of digital asset ETPs from "case-by-case caution" to "standardized efficiency," aiming to "maximize investor choice and promote innovation."

The core content of the new regulations is as follows:

The regulation proposes three listing pathways:

1. The product is traded in markets that are members of the Intermarket Surveillance Group (ISG) and have a market surveillance sharing agreement.
2. Commodity futures must be listed on a DCM regulated by the CFTC for at least 6 months and have a surveillance sharing agreement.
3. If an existing ETF is listed on a national securities exchange in the United States and allocates at least 40% of its assets to the commodity, the new ETP may be exempt from certain requirements.

In short, the new regulations open a "fast track" for cryptocurrency ETFs that meet specific conditions. Based on the three paths mentioned above, October may be the "explosion period" for the first batch of new ETFs to be listed, focusing on assets that have had CFTC-regulated futures contracts for more than 6 months.

The original decision date has "expired", and the ETF issuer is "on the same starting line".

The implementation of the new standards directly affects the ETF applications that were already in the queue. On September 29, the U.S. SEC required issuers of LTC, XRP, SOL, ADA, and DOGE spot ETFs to withdraw their 19b-4 filing documents, and the issuers need to advance their listings according to the new standards. The withdrawal of applications may begin as early as this week. This withdrawal does not mean that the ETF applications have been completely rejected, but rather shifts to a more efficient regulatory path.

It is worth noting that after the withdrawal of the 19b-4 filing, its original decision date (usually referring to the SEC's final ruling deadline for the filing, such as within 240 days after submission) may no longer be relevant. Under the new rules, the SEC may not have strict deadlines, but instead quickly assess based on general listing standards.

As for when the ETF will be approved, although issuers need to resubmit or adjust their applications according to the new general rules, which may involve additional administrative work and a brief delay, most people are optimistic about this, believing that the approval process may be "exceptionally fast," similar to the ETH ETF, which took only a few weeks from withdrawal to approval, and it is expected to be approved in October.

Crypto journalist Eleanor Terrett wrote an analysis stating, "As long as the tokens meet the existing standards, the SEC can approve cryptocurrency ETFs at any time simply by submitting the S-1 filing. Therefore, even if the deadlines for these individual ETFs are looming, the SEC can theoretically make a decision on any or all of the ETFs at any time."

However, Bloomberg ETF analyst James Seyffart cautioned that "everything is full of uncertainty. Coupled with the possibility of a government shutdown, the situation could become very unstable." (Related reading: What would happen to Bitcoin if the U.S. government shuts down?)

Although it is currently unclear how quickly the SEC will process S-1 applications, eliminating the predictability of the original decision date, this change optimizes the process and reduces delays for more cryptocurrency ETFs to enter the market.

Who will lead the ETF competition among the five major candidates?

Although the previously queued ETF applications have returned to the "starting line", the current SEC requests for the issuers to withdraw applications only involve LTC, XRP, SOL, ADA, and DOGE, which may indicate that the first batch of approved ETFs will emerge from these (or all will be approved).

1. XRP ETFs

The XRP ETF is the most anticipated focus in October, with 7 XRP ETF applications currently in process, including institutions like Bitwise, 21Shares, Canary, and Grayscale. Previously, 6 applications were crowded into the window from October 18 to 25, and Franklin Templeton's application has been postponed for a decision to be made by November 14 at the latest.

The XRP spot ETF application was submitted in January 2025, and after the Ripple lawsuit eased, the SEC opened comments in July. XRP futures have been listed on CME for over a year, meeting the new regulatory conditions. Previously, Bloomberg analysts James Seyffart and Eric Balchunas raised the approval probability of the XRP spot ETF to 95%. This high probability prediction stems from the SEC's increased involvement with the application documents, and analysts believe this level of communication is a "clear green light."

In addition, a key advantage of XRP is that it is regarded as a commodity by regulators, significantly reducing the barriers to its ETF applications.

2. SOL ETFs

The SOL spot ETF is currently one of the most watched applications, with participation from 7 large institutions, including VanEck, 21Shares, Bitwise, Franklin Templeton, and others.

On September 27, asset management companies including Fidelity, Franklin Templeton, CoinShares, Bitwise, Grayscale, Canary Capital, and VanEck successively submitted the latest versions of the S-1 form to the U.S. SEC. These amended documents revolve around the staking operation details of the Solana ETF.

After the SEC requested issuers to withdraw their 19b-4 filings, Bloomberg ETF analyst Eric Balchunas raised the approval probability of the SOL ETF from 95% to 100%. He stated, "To be honest, the probability of approval is really 100% now... The general listing standards have rendered the 19b-4 filing meaningless. Now, only the matters related to the S-1 form are left, and the SOL ETF could be approved at any time."

However, it is worth mentioning that BlackRock, the largest issuer of Bitcoin and Ethereum ETFs, has not yet submitted an application for a Solana ETF, which may reflect its cautious attitude towards the regulatory risks associated with Solana.

3. LTC ETFs

As one of the longest-running tokens in the cryptocurrency market, LTC has maintained a high level of security and decentralization since its launch in 2011. Currently, there are three applications for Litecoin ETFs, including the Canary Litecoin ETF, Grayscale Litecoin Trust ETF, and CoinShares Litecoin ETF.

The previous deadline of October 10 for the Litecoin ETF made it a candidate for a "red opening." Although the "expiration" of the original decision date has decreased the likelihood of the Litecoin ETF being approved first, the long-term market stability of LTC, strong compliance, and a technical architecture similar to Bitcoin still give it a great chance of being among the first to be listed.

In addition, Litecoin has not been classified as a security by the SEC like XRP or SOL, making it closer to the commodity characteristics of Bitcoin, significantly reducing regulatory barriers.

4. Cardano (ADA) ETF

Grayscale's Cardano Trust plans to convert into an ETF, with the S-1 filing registered in August, prior to the final deadline set for October 26. Cardano is known for its academic foundation and sustainability; if this spot ETF is approved, it will be the first product from a non-ETH PoS platform. Notably, Grayscale's GDLC (Digital Large Cap Fund) was approved on July 1, which includes ADA, further increasing the likelihood of ADA ETF approval.

5. DOGE ETFs

Currently, there are three applications for DOGE ETFs, including Bitwise, Grayscale, and 21Shares. The SEC is expected to make a ruling by October 12 at the latest. If a DOGE spot ETF is approved, it will become the first Meme ETF.

Conclusion

The key window period in October, regardless of the final outcome, will become an important turning point in the history of crypto ETFs. It will not only affect the prices of related cryptocurrencies but also determine the scale and speed of institutional funds flowing into cryptocurrencies. The crypto market is maturing, and the ETF decision in October may be a crucial step towards gaining further mainstream recognition.

Related reading: SEC's new regulations open the floodgates for crypto ETFs, with 10 major spot ETFs expected to launch?