The Securities and Exchange Commission has postponed decisions on Bitwise's application to introduce staking capabilities to its Ethereum exchange-traded fund and on Grayscale's bid for an XRP ETF, following patterns consistent with the agency's typical review timeline for cryptocurrency investment products.
What to Know:
- The SEC extended its Bitwise Ether staking ETF decision by 45 days, citing need for additional analysis
- Multiple crypto ETF applications face similar delays with final decisions expected around October
- Industry analysts anticipate possible earlier approvals for certain products like Litecoin ETFs by early Q4
On May 20, the SEC announced it would extend its evaluation period for Bitwise's Ether staking ETF application by 45 days to "consider the proposed rule change and the issues raised therein," a decision that needed to be made before the May 22 deadline. The federal agency also delayed rulings on Grayscale's XRP tracking ETF and Bitwise's Solana fund, requesting public comments and initiating "proceedings to allow for additional analysis" to ensure regulatory compliance.
Bloomberg ETF analyst James Seyffart characterized these delays as expected developments rather than setbacks. "The SEC typically takes the full time to respond to a 19b-4 filing," Seyffart stated on X, formerly Twitter. "Almost all of these filings have final due dates in October," he noted, adding that an expedited decision would be "out of the norm."
Seyffart dismissed speculation about regulatory bias, writing: "No matter how Crypto-friendly this SEC is. There's no conspiracy here."
The analyst projected similar delays for other cryptocurrency ETF applications, including those tracking Litecoin. However, he differentiated Litecoin's prospects, suggesting it "has a higher likelihood vs others of getting approved first."
Regarding potential timelines, Seyffart indicated that several XRP exchange-traded product applications have deadlines approaching in the coming days. "If we're gonna see early approvals from the SEC on any of these assets, I wouldn't expect to see them until late June or early July at the absolute earliest. More likely to be in early 4Q," he explained.
Growing Queue of Crypto ETF Applications
The SEC faces mounting deadlines for various cryptocurrency investment vehicles beyond Ether staking and XRP products. According to regulatory filings, the agency must issue determinations on Grayscale's Polkadot tracking ETF by June 11 and make a decision regarding 21Shares' Polkadot ETF application by June 24.
The influx of alternative cryptocurrency ETF applications followed Donald Trump's November election victory and the subsequent resignation of former SEC Chair Gary Gensler, whose departure marked a significant regulatory shift. Under Gensler's leadership from 2021 until January 20, the SEC pursued approximately 100 crypto-related enforcement actions, establishing what industry participants viewed as an aggressive regulatory approach toward digital assets.
The post-Gensler SEC has demonstrated what many perceive as a more accommodating stance toward cryptocurrency firms. Several companies previously targeted by regulatory action have seen their cases dismissed, including cryptocurrency exchange Gemini on February 26 and trading firm Cumberland DRW on March 4, reflecting the changing regulatory environment under new leadership.
Shifting Regulatory Landscape
The delayed decisions reflect broader transitions within the cryptocurrency regulatory framework following leadership changes at the SEC. While the agency continues its methodical review process for new investment products, the dismissal of previous enforcement actions signals potential policy adjustments that could impact future ETF approvals.
Closing Thoughts
The SEC's delayed decisions on cryptocurrency ETF applications represent standard regulatory procedure rather than specific resistance to these products. Analysts anticipate decisions on various crypto investment vehicles throughout 2025, with potential approvals beginning in late 2025 as the regulatory environment continues evolving under new SEC leadership.