The crypto ETF market is about to explode. In a post shared on X, Bitwise said recent regulatory developments have set the stage for what it described as an “ETF-palooza,” marking a sharp shift from years of regulatory resistance toward broader institutional access to digital assets. The prediction comes as the SEC’s streamlined listing standards effective from October 2025 remove the lengthy approval process that previously blocked most crypto funds from reaching retail investors.
But beneath the bullish headlines lurks a harsh reality: “I’m in 100% agreement with Bitwise here,” Seyffart indicated. “I also think we’re going to see a lot of liquidations in crypto ETP products. Might happen at the tail end of 2026, but likely by the end of 2027. Issuers are throwing A LOT of products at the wall”. With Bloomberg data shows 90 existing crypto ETPs managing $153 billion, with 125 filings pending, the market faces an inevitable shakeout where weaker products fail to attract sufficient assets.
The year 2026 will test whether crypto’s institutional adoption story is about sustainable growth or unsustainable hype. As regulatory clarity opens the floodgates, investors must distinguish between flagship funds destined to capture billions and niche experiments doomed to liquidation.
The Regulatory Shift: Why “ETF-palooza” Is Happening
October 2025: The Game-Changer
According to Bitwise, a key inflection point came in October 2025, when the U.S. Securities and Exchange Commission published generic listing standards for crypto-linked ETFs. The move allows issuers to bring products to market under a standardized framework, rather than seeking bespoke approvals for each fund.
The technical significance cannot be overstated. Rasmussen based his prediction on the US Securities and Exchange Commission’s (SEC) release of generic listing standards in October, which eliminated the need for individual 19(b) approvals for qualifying crypto ETPs. “It is essentially a playbook letting ETP issuers like Bitwise know that if an asset meets a certain criteria, then you can list an ETP. We no longer have this 240-day waiting period that we all went through,” he said.
Before October 2025:
- Each crypto ETF required individual SEC review (19(b) filing)
- 240+ day waiting periods standard
- Unpredictable approval timelines
- High regulatory uncertainty deterred many issuers
After October 2025:
- Generic listing standards apply to qualifying crypto assets
- Streamlined approval process (weeks vs. months)
- Predictable regulatory framework
- Flood of new applications (126+ pending)
In September 2025, the SEC introduced generic listing standards for commodity-based trust shares, including crypto assets, fundamentally changing the economics of launching crypto ETFs from high-risk, high-cost ventures to standardized institutional products.
Bitwise’s 10 Bold Predictions for 2026
Bitwise Asset Management released its comprehensive 2026 outlook with predictions spanning price targets, adoption metrics, and market structure. The ETF forecast represents just one piece of a broader bullish thesis:
The Full Prediction List:
Prediction 1: Bitcoin will break the four-year cycle and set new all-time highs. Prediction 2: Bitcoin will be less volatile than Nvidia. Prediction 3: ETFs will purchase more than 100% of the new supply of Bitcoin, Ethereum, and Solana, as institutional demand accelerates. Prediction 4: Crypto equities will outperform tech equities.
And most dramatically: Prediction 10: More than 100 crypto-linked ETFs will launch in the U.S.
The Supply Squeeze Thesis:
Perhaps Bitwise’s most aggressive claim: The firm expects U.S.-listed crypto ETFs to collectively purchase more than 100% of all newly issued BTC, ETH, and SOL next year—a milestone that would mark a new phase of institutional dominance in digital assets.
The math is straightforward: Since ETF launches in 2024, Bitcoin funds alone have bought 710,777 BTC, compared to just 363,047 BTC newly mined in the same period—an early sign of the imbalance. If this pattern extends to Ethereum and Solana while accelerating in 2026, a historic supply squeeze becomes inevitable.
The Coming Wave: Which ETFs Are Launching?
Current Market Status:
Bloomberg data shows 90 existing crypto ETPs managing $153 billion, with 125 filings pending. Bitcoin leads with $125 billion across 60 products, while Ethereum follows at $22 billion in 25 ETFs. Altcoins like XRP and Solana remain niche, with 11–13 products each and $1.5–$1.6 billion in assets.
Expected 2026 Launches:
Already in Pipeline:
- XRP spot ETFs (multiple issuers filing)
- Solana spot ETFs (expansion beyond existing products)
- Dogecoin ETFs (speculative but likely)
- Litecoin, Cardano, and other top-20 altcoins
Thematic and Strategy Products: If realized, the expansion would move the ETF market beyond single-asset products toward thematic, basket-based, yield-oriented, and strategy-driven offerings.
Examples include:
- DeFi baskets (Uniswap, Aave, Compound exposure)
- Layer-1 blockchain indices
- Staking-yield ETFs (where legally permissible)
- Leveraged and inverse crypto ETFs
- Bitcoin mining equity ETFs
The Institutional Gateway:
Notably, the entry of large institutions like Citi, Morgan Stanley, Wells Fargo, and Merrill Lynch into the crypto space is anticipated to accelerate institutional allocations toward spot ETFs and enhance on-chain developments by 2026. These wealth management giants collectively manage trillions in client assets—even 1-2% allocations to crypto ETFs would generate enormous inflows.
The Dark Side: Why 40% Could Liquidate
Bloomberg’s James Seyffart provides crucial counterbalance to Bitwise’s optimism. While agreeing on the quantity of launches, he warns of quality issues:
Historical ETF Failure Rates:
Historical trends suggest caution, with roughly 40% of ETFs launched since 2010 eventually closing, often due to insufficient assets or trading volume. Crypto ETFs face even higher risks due to:
- Extreme Competition: 100+ products chasing finite institutional capital
- Niche Asset Limitations: Many altcoins lack sufficient institutional demand
- Fee Compression: Price wars between issuers erode profitability
- Liquidity Challenges: Thinly-traded products struggle to attract assets
The Liquidation Timeline:
Seyffart said that while some consolidation may begin as early as late 2026, the bulk of liquidations is most likely to occur throughout 2017 as competition intensifies and weaker products fail to attract investor flows (note: likely meant 2027).
The analyst warns that weakly structured offerings and thin liquidity could hasten closures in a crowded environment.
Warning Signs for Failing ETFs:
- Assets under management below $50 million after 12 months
- Daily trading volume under $1 million
- Expense ratios above 0.75% in competitive categories
- Lack of institutional distribution partnerships
- Exposure to tokens outside top-50 by market cap
What This Means for Different Stakeholders
For Retail Investors:
More choice doesn’t always mean better outcomes. For investors, that means more wrappers, more benchmarks, and more fee competition, but also more noise when launches outpace real adoption.
Smart Investor Strategy:
- Prioritize ETFs with $100M+ AUM and established issuers
- Compare expense ratios (0.20-0.25% is competitive)
- Verify daily liquidity exceeds $5M
- Avoid newly-launched niche altcoin ETFs until proven
For Crypto Projects:
ETF listings represent validation and distribution. Many market participants view the launch of additional crypto ETPs that track altcoins as a bullish sign for the market. However, Bitfinex analysts said in August that altcoins are unlikely to see a broad, outsized rally until ETFs offering exposure beyond the largest cryptocurrencies are approved.
For Issuers:
In boardrooms, the key KPI will be assets gathered, not headlines, as the shakeout unfolds. First-mover advantage matters less than execution quality in crowded markets.
Price Impact: Will ETFs Drive 2026 Bull Market?
Bitwise’s broader thesis suggests dramatic price appreciation:
Bitcoin, Ethereum, Solana ATH Predictions:
Bitcoin, Ethereum, and Solana will set new all-time highs · Bitcoin will break the four-year cycle and set new all-time highs · Bitcoin will be less volatile than Nvidia. ETFs will purchase more than 100% of the new supply of Bitcoin, Ethereum, and Solana as institutional demand accelerates.
The Institutional Demand Multiplier:
If ETFs consume >100% of new supply while simultaneously buying existing circulating tokens, basic economics suggests significant upward price pressure. However, this assumes:
- Sustained institutional inflows (not guaranteed)
- No major regulatory setbacks
- Broader market stability (equities, bonds)
- Crypto maintaining risk-on appeal
The Stablecoin Connection:
Currently valued at nearly $300 billion, the market for stablecoins, which include tokenized versions of the US dollar like USDT and USDC, is predicted to reach $500 billion by the end of 2026. Growing stablecoin adoption signals infrastructure maturation that supports ETF growth.
The Altcoin Opportunity and Risk
XRP ETFs Leading the Charge:
With XRP trading near $1.88, inflows have been consecutive for several days, signalling steady adoption by retail and advisors integrating XRP into diversified crypto baskets. XRP’s regulatory clarity post-Ripple settlement makes it the most likely next major ETF success.
Solana’s Institutional Appeal:
With 11-13 existing products and growing DeFi ecosystem, Solana ETFs could see significant flows if the network maintains uptime and developer momentum.
Dogecoin: Meme or Mainstream?
Bitwise’s timeline also points to potential XRP and Dogecoin ETFs entering the market before 2026, reflecting growing issuer confidence in demand for diversified crypto exposure. However, Dogecoin’s lack of fundamental utility makes it the riskiest major ETF candidate.
Conclusion: Boom, Then Bust—Then What?
The crypto ETF market stands at an inflection point. “A clearer regulatory roadmap in 2026 is why we see the stage being set,” Bitwise said, pointing to the cumulative effect of rulemaking, court rulings, and precedent-setting approvals over the past several years. The regulatory green light is real, and 100+ launches are virtually certain.
But “I’m in 100% agreement with Bitwise here,” Seyffart indicated. “I also think we’re going to see a lot of liquidations in crypto ETP products. Might happen at the tail end of 2026, but likely by the end of 2027. Issuers are throwing A LOT of products at the wall”.
The parallel to the 2000 dot-com era is instructive: hundreds of internet companies went public, most failed, but the few survivors (Amazon, Google) changed the world. Similarly, 2026’s ETF wave will produce both winners capturing tens of billions in assets and failures liquidating within 18 months.
For investors, the strategy is clear: focus on flagship products from established issuers (BlackRock, Fidelity, Bitwise) with proven distribution and competitive fees. For projects, ETF listings represent credibility—but only if the funds survive past year one. And for the market overall, “ETF-palooza” marks crypto’s transition from speculative fringe to institutional asset class—chaotic, messy, but ultimately inevitable.
The flood is coming. Choose your lifeboat wisely.
Disclaimer: This content is for educational and reference purposes only and does not constitute any investment advice. Digital asset investments carry high risk. Please evaluate carefully and assume full responsibility for your own decisions
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