Securities Regulatory Commission Faces Test as Issuers of Avalanche, Sui, and Bonk ETFs Venture into Riskier Investment Areas
The world of cryptocurrency exchange-traded funds (ETFs) is buzzing with activity, as five new applications have been filed with the Securities and Exchange Commission (SEC). Among these applications is one from Bitwise for a spot Avalanche ETF, joining the likes of VanEck and Grayscale in pursuit of institutional-grade exposure to AVAX.
Defiance ETFs, meanwhile, have filed an application for Bitcoin and Ethereum basis trade ETFs, executing hedge fund arbitrage strategies by buying spot ETFs while shorting futures contracts. Tuttle Capital Management has also joined the fray, filing for a spot Bonk (BONK) ETF, in addition to "Income Blast" products covering Litecoin and Sui.
The lineup of ETF applications expands an already swelling roster of more than 90 crypto ETF applications pending before the regulator. This surge in filings follows the SEC's clarification that meme coins are not securities, suggesting more applications will follow. REX-Osprey's Dogecoin ETF is preparing to debut this week after clearing its SEC review period.
Pav Hundal, lead analyst at Swyftx, believes infrastructure coins like Avax and Sui have strong approval odds. He is particularly enthusiastic about the basis trade ETF, predicting market-neutral products could be big. However, Pratik Kala, head of research at Apollo Crypto, expressed skepticism about more exotic products like the Basis Trade ETF. He also noted that ETF applications on long-tailed crypto and memecoin assets are being considered as issuers position for a large wealth transfer.
Multiple asset managers have filed applications for spot ETFs for XRP and Solana. Bloomberg analysts see at least eight major managers' XRP spot ETFs as having a 95% chance of SEC approval in October 2025. Solana ETFs filed by firms like Bitwise and 21Shares are also considered likely candidates for approval.
Sudhakar Lakshmanaraja, founder of Digital South Trust, believes the SEC is more likely to approve AVAX and stablecoin/tokenization ETFs. Nate Geraci, co-founder of the ETF Institute, mentioned these filings, adding to the excitement in the crypto ETF space.
However, Kala expressed skepticism about the long-term sustainability and liquidity profile of meme coin-based ETFs. As the filing blitz for crypto ETFs continues, it remains to be seen which applications will receive the green light from the SEC.
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