Key Takeaways
- The partial U.S. government shutdown has forced the SEC to cease reviewing and approving new financial product applications, including over 90 pending crypto ETF filings.
- Analysts’ previous predictions for potential spot Solana ETF approvals in early October are now unlikely due to the SEC’s reduced, non-emergency operations.
- The delay affects a significant raft of filings for funds tracking XRP, Cardano, Litecoin, and Dogecoin, reflecting sustained high demand following the massive success of existing spot Bitcoin ($150 billion AUM) and Ethereum ($22 billion AUM) funds.
The surging momentum in the crypto exchange-traded fund (ETF) market has hit a temporary regulatory roadblock following a partial U.S. government shutdown.
The Securities and Exchange Commission (SEC), responsible for vetting and approving financial products, announced it would “not review and approve applications” during the budget impasse, limiting its activities to only “non-emergency support.”
SEC Halts Review of Altcoin ETFs
This administrative halt directly impacts the growing queue of applications for various crypto-tracking ETFs. The SEC is currently weighing more than 90 applications for funds based on the spot price of multiple altcoins, token combinations, and various digital asset strategies.
Bloomberg fund analysts, who had been expecting the “Crypto ETF approval season” to kick off with products focused on Solana in early October, now view that timeline as increasingly improbable as Senate Republicans and Democrats remain entrenched in the budget debate.
The Success Story Driving The Filings
The flood of new ETF filings over the past 18 months is a direct response to the dramatic success of the already-approved spot Bitcoin and Ethereum funds. The 11 approved BTC funds collectively manage about $150 billion in assets under management (AUM), with BlackRock’s iShares Bitcoin Trust setting records as one of the fastest-growing ETFs ever.
Similarly, Ethereum funds now hold AUM surpassing $22 billion. This success has spurred issuers from both traditional finance and the crypto world to propose funds for other major tokens like XRP, Cardano, and Dogecoin.
Industry Impact and Market Reaction
The co-founder of the ETF Institute, Nate Geraci, noted that the shutdown would certainly “impact the launch of new spot crypto ETFs,” quipping that “ETF Cryptober might be on hold for a bit.”
Despite the temporary regulatory gridlock, the crypto market itself appeared largely unbothered. Solana, the sixth-largest crypto by market capitalization (over $118 billion), saw its price rise over 6% on the news, suggesting investors may view the asset class as a safe-haven or remain focused on long-term growth decoupled from short-term government operations.
Final Thoughts
The U.S. government shutdown has temporarily pressed the pause button on the highly anticipated wave of spot altcoin ETF approvals. While the underlying demand for these regulated crypto products is clearly robust, investors must now wait for a resolution in Washington before the SEC can resume its work and usher in the next phase of institutional crypto adoption.
Frequently Asked Questions
Which crypto ETFs are most likely to be delayed?
All pending spot altcoin ETF applications, with the most immediate impact on predicted Solana funds.
How many crypto ETF applications is the SEC reviewing?
The regulator is reviewing more than 90 applications for various crypto and digital asset strategy ETFs.
Does the shutdown affect existing Bitcoin and Ethereum ETFs?
No, the delay only affects the review and potential approval of new financial product applications.
