What happened?
The Securities and Exchange Commission (SEC) was hit with a wave of crypto ETF applications on Tuesday, including five distinct filings ranging from Avalanche infrastructure to the Bonk meme coin. The issuers, including Bitwise, Defiance ETFs, Tuttle, and T-Rex, are pushing into increasingly exotic territory. This comes amid already swelling roster of over 92 pending crypto ETF applications facing regulators, most of which have October and November deadlines.
Who does this affect?
This move affects various players in the crypto and investment markets. Infrastructure tokens like Avalanche are predicted to have the highest chances of approval, while cryptocurrency projects anchored on memecoins and basis trading products may face more regulatory scrutiny due to their volatility and liquidity profiles. Institutional investors seeking exposure to these digital assets will also be affected by the approval or disapproval of these ETF applications.
Why does this matter?
The surge in crypto ETF applications is significant as it may cause a ripple effect in the market. The anticipation of the approval of these ETFs creates a buzz in the market and could potentially attract substantial investments. If approved, such ETFs would offer investors a straightforward way to invest in cryptocurrency without having to buy it directly. As such, the market impact could be significant, potentially leading to increased liquidity for the cryptocurrencies included in these ETFs and validating their worth in the eyes of traditional investors.