Even with the recent acknowledgments from the Securities and Exchange Commission (SEC) regarding multiple applications for spot crypto exchange-traded funds (ETFs), it seems the agency won’t make any approval decisions until its leadership is firmly established.
“I would have been exceptionally surprised if they had approved any of these filings before Paul Atkins was confirmed by their initial deadlines,” stated James Seyffart, an ETF analyst with Bloomberg Intelligence. “We’ve assumed that any decision that can be deferred until Atkins officially takes his position at the SEC will indeed be postponed.”
A knowledgeable source echoed this perspective, saying, “This administration has demonstrated a willingness to overturn existing norms, so there’s a slight chance for an early approval. I’d be taken aback, but anything is possible,” they remarked.
Former SEC commissioner and current CEO of Patomak Global Partners, Paul Atkins, was nominated by President Donald Trump to become the new leader of the SEC. The prior SEC Chair, Gary Gensler, stepped down from the role in January prior to Trump’s inauguration. However, no confirmation hearing has been scheduled for Atkins as of yet.
On Tuesday, the SEC pushed back decisions on several spot crypto ETFs, including applications for XRP, Solana (SOL), Dogecoin (DOGE), and Litecoin (LTC). While this delay was somewhat anticipated, it wasn’t completely unexpected according to Seyffart.
It has taken issuers several years to gain SEC approval for launching spot bitcoin (BTC) and ether (ETH) ETFs, despite the existence of a well-established futures market for both cryptocurrencies. Though it is not a strict legal requirement to have such a market in place for launching ETFs based on these assets, it was a significant factor for the SEC in the approval of BTC and ETH ETFs.
None of the currently pending ETF applications meet this particular criterion. Nonetheless, Seyffart and his colleagues believe there is a 65% or greater chance that several altcoin ETFs could receive approval by the end of the year. Some applications expected to be decided in May and June may have a higher likelihood of being approved, but this hinges on the confirmation of the new chair.
In reviewing previous applications for spot Bitcoin and Ether ETFs, the SEC generally used the procedural delays it is permitted to extend deadlines for, close to 240 days — the maximum time it is allowed to approve or reject an application.
“Theoretically, we should have a chair by then, but I wouldn’t say it’s assured that these proposals will receive immediate approval at that point. Certainly, it seems more likely than during the March and April timelines for these various spot crypto assets,” Seyffart added.