It was stated by analysts to that Basis trading products could be subjected to “more scrutiny” while an AVAX ETF is believed to have the highest approval odds.
Five distinct crypto ETF applications, which span assets from Avalanche infrastructure to Bonk (BONK), were submitted to the Securities and Exchange Commission (SEC )on Tuesday in what was called “wild” territory by one analyst.
The slate of new crypto filings, which was confirmed by ETF Institute co-founder Nate Geraci, features a spot Avalanche ETF from Bitwise and a Stablecoin & Tokenization ETF. Also present are Defiance funds for Bitcoin and Ethereum basis trades, Tuttle’s “Income Blast” funds for Bonk (BONK), Litecoin (LTC), and Sui (SUI), along with a leveraged 2x Orbs ETF from T-Rex.
The already swelling roster of more than 90 crypto ETF applications currently under review by the regulator is being expanded by these filings.
The spot AVAX ETF is considered to have the highest odds of approval, according to Pratik Kala, head of research at Apollo Crypto, who stated that it is a simple product compared to others.
Institutional-grade exposure to AVAX ETFs is now being pursued by Bitwise, placing it in alignment with VanEck and Grayscale.
Skepticism regarding more unorthodox products was expressed by Kala, who stated that “Basis Trade ETF will be the first of its kind, to my knowledge, and will have more scrutiny.”
The remarks were directed at Defiance ETFs’ market-neutral funds for Bitcoin and Ethereum, which are designed to execute hedge fund arbitrage strategies by purchasing spot ETFs while simultaneously shorting futures contracts.
Kala’s assessment was echoed by Sudhakar Lakshmanaraja, founder of Digital South Trust, who told that the SEC is “far likelier to greenlight AVAX and stablecoin/tokenization ETFs,” while “meme coin-linked products face a steeper climb” because of concerns over “volatility and liquidity.”
A filing for a spot Bonk (BONK) ETF was submitted by Tuttle Capital Management, which has over $3.6 billion in assets under management, making it the second U.S. fund manager to do so, along with “Income Blast” products covering Litecoin and Sui.
It was noted by Kala in an interview with that “Income Blast” products on long-tailed altcoins are also challenging as their options volumes are slim. He added that a stricter stance is justified for memecoin-based ETFs by the SEC due to their long-term sustainability and poorer liquidity profiles.
A statement was made to by Pav Hundal, lead analyst at Swyftx, that “infrastructure coins like Avax are close enough to Ether” to have a high likelihood of approval, and “the same holds true for Sui.”
SEC February Clarity on Meme Coins Sparks Wave of New ETF Applications
It was noted by him that “clarity” was provided by the SEC in February, with a statement that “meme coins aren’t securities,” suggesting that more applications will follow.
A particular enthusiasm was expressed by Hundal for the basis trade ETF. He called it a “standout” because “a market neutral product hasn’t been launched yet,” and he predicted that “these types of yield-bearing funds could be big.”
A flurry of filings is being seen as REX-Osprey’s Dogecoin ETF prepares for its debut this week, following the successful completion of its SEC review period.
It was stated by Kala that “it’s wild that ETF applications on long-tailed crypto and memecoin assets are being considered” as issuers position for “the largest wealth transfer” from boomers to younger generations who believe “memetics plays a large role in investing.”
