The outbreak of counterfeit ETFs has completed the ten-year journey of Bitcoin in half a year: the encryption market is undergoing structural changes

# It Took Bitcoin ETFs Nearly a Decade to Get Approved; Altcoins Did It in Half a Year

By Clow

It took nearly a decade for Bitcoin ETFs to secure regulatory approval, while altcoins achieved the same feat in just six months.

In November 2025, an incredible event unfolded on Wall Street. Solana, XRP, and Dogecoin—altcoins once dismissed as "speculative toys" by mainstream finance—collectively debuted on the New York Stock Exchange and Nasdaq within weeks, transforming into regulated ETF products.

What's even more extraordinary is that these ETFs did not undergo the SEC's rigorous individual review process. Instead, they leveraged a brand-new set of "Universal Listing Standards" and an obscure fast-track mechanism under Rule 8(a), essentially taking effect automatically with regulatory acquiescence.

The rules of the game are being completely rewritten.

## 01 Regulatory "Strategic Retreat"

For a long time, the SEC's stance on cryptocurrency ETFs could be summed up in four words: delay as much as possible.

Every new crypto ETF application required exchanges to submit a rule change request. The SEC had a lengthy 240-day review period and frequently rejected applications on the eve of deadlines, citing "risks of market manipulation." This kind of "law-enforcement-based regulation" consigned countless applications to oblivion.

But everything changed abruptly on September 17, 2025.

The SEC approved a proposal by three major exchanges to revise the "Universal Listing Standards." This seemingly technical adjustment actually opened a door for altcoin ETFs: crypto assets meeting specific criteria could be listed directly without individual review.

The core eligibility criteria are straightforward:

1.  The asset has at least six months of trading history on a futures market regulated by the CFTC, and the exchange has signed a surveillance agreement with that market;

2.  There is already an existing ETF with at least a 40% exposure to the asset.

Meeting either criterion allows an altcoin ETF to take the fast track. Solana, XRP, and Dogecoin all happened to meet these standards.

Taking an even bolder step, issuers found another "accelerator"—Rule 8(a).

Traditional ETF applications typically included a "delayed effectiveness" clause, allowing the SEC to conduct open-ended reviews. However, in the fourth quarter of 2025, issuers such as Bitwise and Franklin Templeton began omitting this clause from their applications.

Under Rule 8(a) of the Securities Act of 1933, if a registration statement contains no provisions for delayed effectiveness, it automatically takes effect 20 days after submission, unless the SEC proactively issues a stop order.

This put the SEC in a tough spot: either find sufficient grounds to block the application within 20 days or watch the product launch automatically.

Plagued by staffing shortages due to a government shutdown and pressured by court rulings in cases like Ripple and Grayscale, the SEC was barely able to handle hundreds of backlogged applications. More importantly, SEC Chairman Gary Gensler resigned on January 20, 2025, leaving the entire regulatory agency in a "lame duck" state.

Seizing this once-in-a-lifetime window of opportunity, issuers raced to push their products forward.

## 02 Solana ETF: A Bold Attempt at Staking Rewards

Boasting the technical reputation of a high-performance public blockchain, Solana has become the third "blue-chip" asset to be converted into an ETF, following Bitcoin and Ethereum.

As of November 2025, six Solana ETFs have been listed, including Bitwise’s BSOL, Grayscale’s GSOL, and VanEck’s VSOL. Among them, Bitwise’s BSOL stands out for its aggressiveness—not only does it provide exposure to Solana’s price movements, but it also attempts to distribute on-chain rewards to investors through a staking mechanism.

This is a bold endeavor. The SEC has long classified staking services as securities offerings. Yet Bitwise explicitly labeled BSOL as a "Staking ETF" in its S-1 filing, striving to design a compliant structure for distributing staking rewards. If successful, this would enable the Solana ETF to not only capture price appreciation but also generate dividend-like cash flows, making it far more appealing than non-income-generating Bitcoin ETFs.

Another point of contention is that Solana has no futures contracts on the CME. Based on the SEC’s historical reasoning, this alone should have been grounds for rejection. However, the regulators ultimately approved the ETF, which may indicate their recognition that the long-term trading history of regulated exchanges like Coinbase is sufficient to support effective price discovery.

The market performance has also been impressive.

Data from SoSoValue shows that Solana ETFs recorded net inflows for 20 consecutive days since their launch, with cumulative inflows reaching $568 million. While Bitcoin and Ethereum ETFs faced massive outflows in November, Solana ETFs bucked the trend to attract capital. By the end of November, the total assets under management (AUM) of the six Solana funds had reached $843 million, accounting for approximately 1.09% of Solana’s total market value.

This indicates that institutional funds are rotating their holdings—withdrawing from the crowded Bitcoin trades to seek emerging assets with higher beta and greater growth potential.

## 03 XRP ETF: Valuation Reassessment After Regulatory Settlement

XRP’s path to ETF conversion has long been hindered by the legal dispute between Ripple Labs and the SEC. After the two parties reached a settlement in August 2025, the sword of Damocles hanging over XRP was finally lifted, triggering a surge in ETF applications.

As of November, five XRP ETFs have been listed or are set to debut soon:

1.  Bitwise’s XRP ETF launched on November 20, directly adopting "XRP" as its ticker symbol. This bold marketing strategy sparked controversy—some hailed it as a stroke of genius that allows retail investors to locate the product instantly when searching, while others criticized it for blurring the line between the underlying asset and the derivative fund.

2.  Canary’s XRPC made its debut on November 13, recording a record-breaking $243 million in net inflows on the first day.

3.  Grayscale’s GXRP launched on November 24. Converted from a trust product, it eliminates the issue of discounts or premiums to its net asset value.

Despite strong initial inflows, XRP’s price came under short-term pressure after the ETFs went public. In the days following Bitwise’s ETF launch, XRP’s price dropped by approximately 7.6%, and even plummeted by more than 18% at one point.

This is a classic case of "buy the rumor, sell the news." Speculative funds bought XRP in advance amid expectations of ETF approval and took profits once the news was confirmed. Macroeconomic factors, such as robust employment data that dampened interest rate cut expectations, also weighed on the performance of risk assets across the board.

In the long run, however, ETFs have brought sustained passive buying to XRP. Data shows that cumulative net inflows into XRP ETFs have exceeded $587 million since their launch. While speculators are exiting the market, allocating institutional funds are moving in, establishing a higher long-term price floor for XRP.

## 04 Dogecoin ETF: From Meme Coin to Legitimate Asset Class

The conversion of Dogecoin into an ETF marks a crucial turning point: Wall Street has begun to accept meme coins—assets driven by community consensus and network effects—as legitimate investment targets.

Three Dogecoin-related products are currently available:

1.  Grayscale’s GDOG launched on November 24.

2.  Bitwise’s BWOW has submitted an application under Rule 8(a), awaiting automatic effectiveness.

3.  21Shares’ TXXD is a 2x leveraged product tailored for investors with a high-risk appetite.

The market response has been relatively lukewarm. GDOG recorded a mere $1.41 million in trading volume on its first day with no net inflows. This may stem from the highly retail-oriented nature of Dogecoin’s investor base—retail investors prefer to hold the token directly on exchanges rather than paying management fees for an ETF.

Nevertheless, the market generally expects Bitwise’s BWOW to stimulate institutional demand for Dogecoin ETFs through its lower fees and stronger marketing capabilities.

## 05 The Next Wave: Litecoin, HBAR, and BNB

Beyond the three popular altcoins, Litecoin, Hedera (HBAR), and BNB are also actively pursuing ETF conversion.

As a code fork of Bitcoin, Litecoin is the most similar to Bitcoin in terms of regulatory classification and is regarded as a commodity. Canary Capital submitted an ETF application in October 2024 and filed Form 8-A—the final step for exchange registration—on October 27, 2025, signaling that the Litecoin ETF is on the verge of launch.

Canary has taken the lead in applying for an HBAR ETF, with Grayscale following closely behind. A key breakthrough came in February 2025 when Coinbase Derivatives launched CFTC-regulated HBAR futures contracts, laying the necessary regulatory and market foundation for HBAR to meet the Universal Listing Standards. Nasdaq has submitted a Form 19b-4 on behalf of Grayscale, suggesting that HBAR is highly likely to be the next asset to gain ETF approval.

BNB’s ETF bid represents the most challenging attempt. VanEck has filed an S-1 application for the VBNB ETF. However, given BNB’s close ties to Binance and the exchange’s previous complicated disputes with U.S. regulators, the BNB ETF is seen as the ultimate test of the regulatory stance adopted by the SEC’s new leadership.

## 06 The Crypto Multiplier Effect: Liquidity as a Double-Edged Sword

The launch of altcoin ETFs does more than just add new investment products to the market; it is reshaping the entire crypto landscape through structural capital flows.

A study by the Bank for International Settlements (BIS) introduced the concept of the "Crypto Multiplier": the market value of crypto assets responds non-linearly to capital inflows. For altcoins with far lower liquidity than Bitcoin, institutional capital brought in by ETFs is likely to trigger drastic price swings.

Data from Kaiko shows that the 1% market depth for Bitcoin currently stands at approximately $535 million, while the market depth for most altcoins is only a fraction of that. This means that the same amount of capital inflow—such as the $105 million in first-day inflows for Bitwise’s XRP ETF—should theoretically have a much greater impact on XRP’s price than on Bitcoin’s.

The current "sell the news" phenomenon has masked this effect. Market makers need to purchase spot tokens during the initial ETF subscription period. However, if the overall market sentiment is bearish, they may hedge risks by shorting futures or absorb inventory in the over-the-counter market, temporarily curbing spot price increases.

As the AUM of these ETFs continues to grow, this passive buying will gradually drain liquidity from exchanges, leading to more volatile and upward-trending price movements in the future.

## 07 Market Stratification: A New Valuation System

The launch of ETFs has intensified liquidity stratification in the crypto market:

1.  Tier 1 (ETF-eligible assets): Bitcoin, Ethereum, Solana, XRP, and Dogecoin. These assets have legal fiat entry points, allowing Registered Investment Advisors (RIAs) and pension funds to allocate capital to them without obstacles. They will enjoy a "compliance premium" and lower liquidity risks.

2.  Tier 2 (non-ETF assets): Other Layer 1 tokens and DeFi tokens. Lacking ETF access, these assets will remain dependent on retail capital and on-chain liquidity. Their correlation with mainstream assets may weaken, and they face the risk of marginalization.

This division will reshape the valuation logic of the entire crypto market, shifting from speculation-driven pricing to a multi-polar valuation system based on regulatory compliance and institutional allocation.

## 08 Conclusion

The wave of altcoin ETFs in late 2025 marks a decisive step for crypto assets to evolve from "peripheral speculation" to "mainstream portfolio allocation."

By cleverly utilizing the Universal Listing Standards and Rule 8(a), issuers have successfully broken through the SEC’s regulatory barriers, bringing once-controversial assets like Solana, XRP, and Dogecoin onto regulated exchanges.

This not only provides these assets with access to compliant capital but, more importantly, de facto confirms their non-security nature from a legal perspective.

Despite facing short-term pressure from profit-taking, as institutional investors start allocating 1%-5% of their portfolios to these assets in their investment models, structural capital inflows will inevitably push up the valuations of these "digital commodities."

In the next 6-12 months, we are likely to see more assets—such as Avalanche and Chainlink—attempt to replicate this path.

In the multi-polar crypto market, ETF eligibility will become the most critical dividing line between core assets and peripheral assets.

For investors, this transformation brings not only investment opportunities but also a complete restructuring of the market landscape. A market once driven by speculation and narratives is evolving into a new order anchored by compliant access channels and institutional allocation.

This process is irreversible.

## Disclaimer

The views expressed in this article are solely those of the author and do not constitute investment advice on this platform. This platform makes no warranties regarding the accuracy, completeness, originality, or timeliness of the information contained in the article, nor shall it be liable for any losses arising from the use of or reliance on such information.