Crypto Etf Filings Flood Sec With Avalanche, Sui, And Bonk Products As Issuers Test Limits

What Happened

The surge comes as REX-Osprey’s XRP and Dogecoin ETFs are confirmed to launch on Thursday using the faster 40 Act structure. The Act is an alternative pathways to market that bypass traditional SEC approval bottlenecks.

At the same time, memecoins and basis trading products face “more scrutiny” from regulators concerned about their volatility and liquidity profiles.

This follows Safety Shot’s $25M BONK treasury strategy launched earlier in August.

Beyond crypto ETFs, Bitwise also filed for a Stablecoin & Tokenization ETF.

Generic Listing Standards Could Trigger Simultaneous Product Launch Wave

Generic standards would accelerate multiple product launches simultaneously, rather than having them staggered and requiring separate approvals.

Market Context

The infrastructure positioning and established market cap provide regulatory comfort compared to more speculative alternatives.

For instance, Tuttle Capital Management became the second U.S. fund manager filing for spot Bonk ETF exposure alongside “Income Blast” products covering long-tail altcoins.

However, analysts warn memecoin-linked products face steeper climbs due to concerns over “volatility and liquidity” compared to established infrastructure tokens.

Why It Matters

The basis trade approach represents the “first of its kind” and will likely face “more scrutiny” given its complexity.

Similar to Nate, Balchunas also expects a “flood of ETFs probably in a couple months” following anticipated October approval of streamlined procedures that could address accumulated demand across altcoin categories.

Details

A wave of crypto ETF applications hit the SEC on Tuesday, with five distinct filings spanning Avalanche infrastructure to Bonk meme coin as issuers push into increasingly exotic territory.

The lineup includes Bitwise’s spot Avalanche ETF, Defiance ETFs built around Bitcoin and Ethereum basis trades, Tuttle’s “Income Blast” funds covering Bonk, Litecoin, and Sui, plus T-Rex’s leveraged 2x Orbs ETF.

ETF Institute co-founder Nate Geraci warned, “You all have no idea what’s coming over the next few months” as floodgates open beyond traditional Bitcoin and Ethereum products.

The filings expand an already swelling roster of over 92 crypto ETF applications pending before regulators, with most facing October and November deadlines.

Bitcoin ETFs recorded $292 million in net inflows while Ethereum products saw $61.74 million in outflows on September 16.

Analysts assign varying approval odds to the new applications, with infrastructure tokens, such as Avalanche, receiving the highest chances.

Infrastructure Tokens Lead Approval Odds While Exotic Products Face Steeper Climb

Bitwise joins VanEck and Grayscale in pursuing institutional-grade Avalanche exposure, with analysts calling AVAX the “highest chance of approval because it’s a simple product relative to others.”

The SEC provided clarity in February that memecoins aren’t securities. Most analysts believed that infrastructure coins like Avalanche are “close enough to Ether” to warrant strong consideration for approval.

The institution aims to address the institutional demand for exposure to programmable money and real-world asset tokenization trends, which are accelerating across traditional finance integration with blockchain infrastructure.

Bloomberg analyst Eric Balchunas attributes systematic SEC delays to coordination with generic listing standards requested by Cboe and NYSE in July.

The institutions proposed amendments that would allow for automatic crypto ETF listings without requiring case-by-case regulatory review, potentially eliminating the current 240-day process.

The SEC extended Franklin Templeton’s Solana and XRP ETF decisions to November 14 while postponing BlackRock’s Ethereum staking amendment to October 30.