Generic Listing Standards for ETFs - How Do Fundamentals Stack Up?

Digital assets just cleared another major milestone: The SEC has approved generic listing standards for ETFs (or specifically, “Commodity-Based Trust Shares”) that explicitly cover certain digital assets. In practice, this means prospective issuers no longer need to slog through a lengthy filing process; they can lean on a clear set of criteria to launch new products.

This clarity is a breakthrough for the industry and should unlock a wave of accessible, regulated vehicles for investors to build crypto exposure. But the opportunity set is still narrow. By our count, only ~14 assets currently qualify, and the list is dominated by Layer 1s and currencies, with a few memecoins as well. Notably, these are also some of the more richly valued projects in the market, see chart above.

So while this is a leap forward, we remain a long way from building a well-diversified crypto portfolio via ETFs. We look forward to further regulatory updates that could bring more diverse assets like DeFi or DePIN tokens into the ETF fold, giving investors exposure to exciting growth areas within crypto. Encouragingly, with the US regulators finally moving at speed, that next step may come sooner than expected.

The information herein is for general information purposes only, is not investment advice, and should not be used in the evaluation of any investment decision. An investment in digital assets involves a high degree of risk. Past performance is no guarantee of future results.