Oh ho! Gather ’round, dear chaps, for the cryptocurrency circus has come to town, and it’s brought along over 45 active filings for crypto-related exchange-traded funds (ETFs). 🎉✨
According to the clever clogs at Kaiko Research, these files include some jolly initiatives to transform closed and trust funds into spot ETFs, as well as applications for memecoins like DOGE and TRUMP. 🐶👑
Now, let’s not forget the ambitious fellows at Tuttle Asset Management, who’ve recently filed for ten leveraged ETFs. ProShares and Vol Shares have also joined the party, applying for futures-based ETFs on assets like SOL and XRP, despite the fact that there’s nary a regulated futures market for these cryptocurrencies in the US. 🙄
Efficient and secure markets are essential for any ETF to succeed, but as Bitwise points out in its XRP filings, “Manipulative trading activity on digital asset trading platforms, which, in many cases, are largely unregulated or may not be complying with existing regulations.” 🙅♂️🚫
When it comes to market depth, BTC and ETH, with their active spot ETFs, are leagues ahead of assets like XRP, SOL, and LTC. Most assets make up less than 10% of BTC’s daily market depth, which is quite the pickle. 🥒…
Our friends at JP Morgan and Jane Street, the authorized participants, rely on strong liquidity. The launch of BTC spot ETFs has improved liquidity, which is crucial for maintaining price stability between ETF shares and the underlying BTC. However, XRP and SOL still struggle with uneven liquidity, which could hinder their ETF certification. 🚧…
And then there’s the concentration risk. 80% of crypto trading happens on offshore platforms, where transparency and regulatory oversight are as rare as hen’s teeth. The lack of USD trading pairs for XRP, SOL, and LTC makes it difficult to incorporate them into regulated ETFs, causing all sorts of headaches for NAV computations. 🤕…
But fear not, for despite these challenges, demand for crypto ETFs remains as strong as ever, fueled by retail speculation and institutional interest. It’s a wild ride, my dears, and we wouldn’t have it any other way! 🎢…
Also Raed: XRP ETF Approval in 2025 has 82% chances on Polymarket
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2025-02-01 21:09