Crypto ETF Wave Could Reshape Market, but Not All Funds Will Survive

U.S. investors may soon face a flood of new crypto exchange-traded funds (ETFs), with over 90 applications waiting at the Securities and Exchange Commission (SEC). While approvals could begin as early as this fall, analysts warn that only a fraction of these funds will attract lasting demand.

“The ETF market is a meritocracy — investors vote with their money,” said Nate Geraci, president of NovaDius Wealth Management. “Some products will thrive, others will close. That’s how it’s always worked.”

Demand Is Real, but Expectations Need Calibration

Geraci sees strong appetite for broader exposure to digital assets, pointing to the success of spot bitcoin and ether ETFs. BlackRock’s iShares Bitcoin Trust (IBIT) has already grown into the largest ETF launch in history with nearly $85 billion in bitcoin under management, while ether ETFs have pulled in $10 billion since July alone.

He believes Solana- and XRP-linked products could follow a similar trajectory. However, Bloomberg ETF analyst James Seyffart cautioned that many of the smaller, altcoin-based products may fail. “There’s no way five ETFs tracking the same coin will all survive,” he said.

A Market Test Phase

Both Geraci and Seyffart expect the next 12 to 18 months to be a trial period, with issuers launching dozens — if not hundreds — of crypto-related products. Some will capture flows, but many will shut down due to lack of demand.

Seyffart framed closures not as failures but as part of the natural cycle of ETF markets. “In the ETF world, closures are a feature, not a flaw,” he said.

What’s at Stake

The expanding pipeline reflects growing institutional interest in crypto, especially since the SEC approved spot bitcoin and ether ETFs last year. New filings include funds tied to Solana (SOL), XRP, and even multi-asset baskets, designed to give traditional investors crypto exposure without the technical hurdles of wallets and private keys.

Still, analysts agree the responsibility ultimately lies with investors. “Regulators open the gates, but only asset flows decide who stays afloat,” Geraci said.