Crypto Industry Coming of Age: SEC Opens the Floodgates, Wall Street ETP Feast Begins

Author: cole

On September 17, 2025, the U.S. Securities and Exchange Commission (SEC) made a seemingly unremarkable decision that was actually worthy of being recorded in history: approving the "universal listing standards" for exchange-traded products (ETPs) for spot commodities (including digital assets).

For outsiders, this is just a piece of news that is difficult to understand. But for the believers, developers, and investors who have been navigating the crypto world for years, this was a thunderclap. SEC Chairman Paul S. Atkins' official statement sounded restrained and professional: "This move is intended to maximize investor choice and foster innovation by streamlining the listing process." But the market's interpretation was more blunt and enthusiastic: "The era of the cryptocurrency 'ETPalooza' has arrived." So what exactly does this wave of activity signify? What financial magic lies behind the mysterious code "ETP"? More importantly, once the regulatory green light is given, how will this capital feast completely reshape the crypto landscape? Your "Crypto ETF" Isn't a Real ETF To understand this revolution, we must first understand Wall Street's alphabet soup. The "crypto ETF" we often talk about is actually a general term, hiding different product structures and risks. ETP (Exchange Traded Product): This is the general term for all such products. They can be bought and sold at any time on an exchange, just like stocks. ETF (Exchange-Traded Fund): This is the model child of the family. It's a true fund that directly holds the basket of assets it tracks (such as stocks and bonds). In the United States, the vast majority of ETFs are strictly regulated under the Investment Company Act of 1940, which requires asset diversification and provides the highest level of investor protection. ETC (Exchange-Traded Commodity): This is a disguise tailor-made for cryptocurrencies. Because Bitcoin or Ethereum are single assets and fail to meet the "diversification" requirements of the 1940 Act, a "spot Bitcoin ETP" cannot legally register as a standard ETF. Its true structure is more like an ETC—a debt security backed by actual holdings of a single commodity, such as gold or Bitcoin. Key Difference: When you buy a so-called "spot Bitcoin ETF," you're not buying a diversified fund fully protected by the 1940 Act. You're buying a trust product that tracks a single asset and is structured more like an ETC. While it's traded on a regulated exchange, its inherent regulatory protections and risk profile are fundamentally different from those of traditional stock ETFs. A Revolutionary Shift in SEC Approval: The SEC's new regulations have effectively upgraded the issuance of crypto ETPs from a muddy, lengthy, and manually reviewed path to a clear, regulated highway. The Old World: A Long Wait: In the past, any spot crypto ETP seeking to list had to submit a separate application to the SEC, a process that could take up to 240 days and was fraught with uncertainty. Issuers were required to demonstrate their ability to "prevent fraud and market manipulation," a high bar. A New Era: The "Highway" Opens The new "Universal Listing Standard" has completely changed all of this. Now, as long as a crypto asset meets the pre-set criteria, the related ETP product can be directly listed, shortening the entire process to 60-75 days. For the crypto industry, the most critical criterion is that the futures contract for the asset has been traded on a market regulated by the U.S. Commodity Futures Trading Commission (CFTC) for at least six months. The SEC's move is a clever one, leveraging the work of its sister regulator, the CFTC, by using a mature futures market to determine the health of the corresponding spot market.

"Green List" Released and Key Roles Clarified

According to this new regulation, a "Green List" immediately surfaced. All crypto assets that have been traded on the CFTC-regulated Coinbase Derivatives exchange for more than six months have automatically obtained a "highway pass" for their spot ETPs. The list includes: Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Litecoin (LTC), Dogecoin (DOGE), Cardano (ADA), Avalanche (AVAX), Chainlink (LINK), Stellar (XLM) and Ripple (XRP), among others. It must be noted that the SEC's approval order is directed at traditional stock exchanges like Nasdaq, Cboe, and NYSE Arca—the "storefronts" where end investors buy and sell ETP shares. So what is Coinbase's role? It serves as an upstream "qualification center." A crypto asset futures contract with a six-month track record of trading on Coinbase Derivatives, a CFTC-regulated market, qualifies for "fast track" status. In short: Coinbase's compliant futures market is the "litmus test," while exchanges like Nasdaq are the ultimate "trading market." The "ETP Feast" Begins. The SEC's decision has opened Pandora's box, and its chain reactions will create huge waves in every corner of the market. 1. Capital Reshaping: A "Channel" for Hundreds of Billions of Dollars In just one year after their launch, the first batch of Bitcoin spot ETPs attracted over $36 billion in net capital inflows. This demonstrates the immense pent-up investment demand in the market. Many traditional investors are eager to enter the crypto market, but are blocked by technical barriers like managing private keys and using wallets. ETPs now offer a perfect bridge for them. They can buy Solana or Chainlink with a single click, just like buying or selling Apple stock, from their familiar brokerage accounts. Analysts predict that "over 100 crypto ETPs" could launch in the next 12 months, signaling the beginning of a massive bull market driven by mainstream capital. 2. Structural Reshaping: The Crypto Market Has "Wall Street Time" The emergence of ETPs is fundamentally changing the heartbeat of the crypto market. The "4 PM Effect": Because ETP issuers need to calculate the fund's net asset value around 4 PM New York time, they must buy and sell large quantities of real crypto assets in the market around this time. This results in a predictable, large spike in trading volume on exchanges like Coinbase around this time each day. The crypto market's original 24/7 trading characteristics are gradually being tamed, becoming synchronized with Wall Street's daily routine. The Return of the "In-Physical Subscription and Redemption" Mechanism: Recently, the SEC finally approved the "In-Physical Subscription and Redemption" mechanism. This means that large market makers can directly exchange a basket of real Bitcoin for ETP shares, rather than using cash. This is the standard operating model for most established ETFs, significantly reducing costs and improving efficiency. 3. Reshaping Power: Coinbase's Magnificent Turnaround and the "New War" Among Exchanges The rise of ETPs is rewriting the rules of survival for crypto exchanges. For US-based compliance giants like Coinbase, this presents both a danger and an opportunity. The danger lies in the fact that when investors can easily purchase crypto products through traditional brokerages, some of Coinbase's retail trading fee revenue will undoubtedly be diverted. The "machine" is even more enormous. Coinbase is rapidly transforming into an arms dealer for the entire ETP ecosystem. It provides critical custody, market data, and monitoring services to nearly all major ETP issuers, opening up a lucrative and stable new world of B2B institutional business. By contrast, exchanges with shallower roots in the US regulatory system will undoubtedly be on the defensive in their fight for this emerging institutional business. A new war for institutional services has begun. Conclusion: The SEC's "highway" for crypto ETPs is undoubtedly a watershed moment in the development of crypto assets. However, this is just the beginning, far from the end. As the crypto market becomes more deeply integrated with traditional finance, it will be increasingly influenced by macroeconomic data, Federal Reserve policies, and global risk sentiment. For those of us in this market, the only certainty is: the rules of the game have changed. Understanding the rules, embracing change, and maintaining a reverent eye for risk will be the ultimate formula for survival and growth in this exciting industry.