The U.S. Securities and Exchange Commission (SEC) has approved generic listing standards for commodity-based trust shares, a move that is expected to expedite the approval process for crypto Exchange Traded Funds (ETFs). This decision eliminates the need for the SEC to individually assess each crypto ETF application, potentially unlocking wider market access and a surge of new offerings.

Streamlining the Approval Process

Under the new framework, exchanges like Nasdaq, NYSE Arca, and Cboe BZX can list shares of commodity-based trusts, including those holding digital assets, under standardized criteria. This streamlined process could reduce the approval times for qualifying applications from as long as 240 days to as little as 75 days. Instead of requiring prior SEC approval for each individual ETP, exchanges will need to post specific information on their website regarding the ETP within five business days after trading commences, provided the ETP meets the generic listing standards.

Requirements for Generic Listing

The new rules are expected to require the presence of futures contracts on regulated U.S. platforms such as CME, Cboe, or Coinbase Derivatives Exchange. To be an eligible holding for an ETP under the new generic listing rules, the commodity may trade on a market that is an Intermarket Surveillance Group member, or underly a futures contract traded for at least six months on a CFTC-regulated designated contract market. This clears the path for a more diverse set of ETPs, including those based on Solana, XRP, Chainlink, Cardano, Avalanche, Polkadot, Hedera, Dogecoin, Shiba Inu, Litecoin, and Bitcoin Cash.

Impact and Potential Outcomes

Bitwise Chief Investment Officer Matt Hougan drew parallels between this decision and the SEC's "ETF Rule" introduced in 2019. Before that rule, ETFs faced individual reviews, limiting growth to about 117 launches per year. After the rule was implemented, launches increased to roughly 370 annually, attracting a broader range of issuers. Hougan believes the crypto industry could experience a similar acceleration once generic standards are adopted.

While the approval of generic listing standards is a positive step for the crypto industry, some experts caution that it does not guarantee significant inflows into crypto ETFs. Hougan noted that the launch of more products will not, by itself, create investor demand. He cited the example of U.S. spot Ethereum ETPs, which began trading in June 2024 but did not gather substantial assets until April 2025, coinciding with the growing adoption of stablecoins.

Factors Influencing Market Demand

Despite the potential for increased crypto ETF listings, several factors could influence market demand. These include:

• Interest Rate Cuts: Expected interest rate cuts could make crypto assets more attractive to investors.
• ETP Inflows: Continued inflows into existing and new crypto ETPs could drive further growth.
• Tokenization: The increasing tokenization of real-world assets could create new opportunities for crypto investments.
• Stablecoin Momentum: The growing adoption and use of stablecoins could provide a foundation for broader crypto market participation.

The SEC's approval of generic listing standards marks a significant step toward mainstreaming crypto investments. By streamlining the ETF approval process, the SEC is paving the way for a wider range of crypto-based investment products, potentially attracting more institutional and retail investors to the digital asset space. However, the ultimate success of these products will depend on various market factors and the continued evolution of the crypto industry.