Over 70 crypto ETFs await SEC review in 2023, featuring varied assets. Despite institutional bullishness, caution exists regarding adoption rates for less known cryptos. Altcoin ETF inflows may total $100M-$1B, while options-based ETFs could see higher institutional interest. ARK Invest added staked Solana to its ETFs, marking a first for SOL in US ETFs.
Over 70 cryptocurrency exchange-traded funds (ETFs) are under review by the US Securities and Exchange Commission (SEC) in 2023, as reported by Bloomberg analyst Eric Balchunas. These proposals include a variety of assets, ranging from altcoins and memecoins to derivative instruments. Balchunas highlighted the diverse offerings, including XRP, Litecoin, and Solana, and expressed anticipation for a dynamic year ahead.
Despite the growing interest in crypto among institutional investors, there is uncertainty regarding their actual demand for these ETFs. A recent report by Coinbase and EY-Parthenon indicated that over 80% of institutions intend to increase crypto allocations by 2025. However, analysts warn that ETF approvals don’t necessarily lead to significant adoption, particularly for those featuring lesser-known cryptocurrencies.
Sygnum Bank’s Katalin Tischhauser predicts that altcoin ETFs may witness inflows between $100 million and $1 billion, significantly lower than spot Bitcoin funds, which attracted over $100 billion in net assets last year. Analysts believe that ETFs based on options and derivatives could attract more institutional interest due to their ability to offer structured exposure to cryptocurrencies like Bitcoin and Ether.
Options contracts provide investors the right to purchase or sell an asset at a predetermined price, which could bolster portfolio strategies and significantly drive up digital asset prices. In a related move, on April 21, ARK Invest expanded its ETFs by adding staked Solana (SOL), representing the first instance where SOL is available to US investors within an ETF.
