US government reopening may unleash crypto ETF floodgates: Analyst
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The US government’s ending of the shutdown and return to the normal legislative session may spark a surge in new crypto exchange-traded fund (ETF) approvals by the Securities and Exchange Commission (SEC) in 2026, according to market analysts.
There is “huge” demand for crypto ETFs and exchange-traded products (ETPs), Matt Hougan, chief investment officer at investment firm Bitwise, told CNBC on Wednesday.
“It’s going to be ETF-palooza in crypto land. I think there will be 100-plus launches. We’re going to see a lot of single-asset crypto ETPs. What I’m most excited about, though, is the growth of index-based crypto ETPs.”
Demand for crypto index ETFs will be driven by investors looking for a small, passive crypto allocation, Hougan said.
Crypto ETFs siphon capital from traditional financial markets into digital assets, helping boost prices, and some analysts attribute the change in crypto market dynamics to capital flows from ETFs.
Related: VanEck Solana ETF goes live, Grayscale DOGE ETF expected on Monday
Crypto ETFs bleed, placing more pressure on markets
Heavy capital outflows from crypto ETFs are exerting additional downward pressure on cryptocurrency prices, despite strong investor interest.
Canary Capital’s XRP ETF (XRPC) launched on Thursday, debuting to $58 million in first-day trading volume, making it the most successful ETF launch in 2025.
Despite the record-high trading volume, the price of XRP (XRP) has declined by about 13% over the past week, according to CoinMarketCap.
Bitcoin (BTC) ETFs tell a similar story, with about $1.1 billion in outflows so far in November, according to Farside Investors, putting the investment vehicle on track for its worst month on record.
The total average cost basis for Bitcoin ETFs is about $89,600, a level that Bitcoin fell below on Tuesday, putting the average ETF investor underwater, according to Sean Rose, an analyst at crypto market analysis platform Glassnode.
Bitcoin ETF investors held strong despite October’s market crash, with the ETFs seeing about $1 billion in outflows in the month following the crash, according to senior Bloomberg ETF analyst Eric Balchunas.
Long-term BTC whales were responsible for the majority of BTC sold in October and November, Balchunas said.
Since his comments, the crypto market has extended its decline, and ETF have continued to hemorrhage capital.
Magazine: Solana vs Ethereum ETFs, Facebook’s influence on Bitwise: Hunter Horsley
