The US Securities and Exchange Commission (SEC) is navigating a wave of cryptocurrency-related exchange-traded fund (ETF) applications, reflecting growing interest in integrating digital assets into traditional investment products. Recent filings, including VanEck’s proposed “Onchain Economy ETF” and Bitwise’s 10 Crypto Index Fund ETF, are part of efforts to offer diversified exposure to the expanding cryptocurrency ecosystem. While these funds aim to simplify access to blockchain-driven innovations, regulators remain cautious, extending timelines for review as they evaluate potential market risks and investor protections. 

VanEck Files Application for Onchain Economy ETF, Signaling Growth in Crypto Investment Products

In a noteworthy move for the cryptocurrency industry, asset management giant VanEck has submitted an application to the US Securities and Exchange Commission (SEC) for the establishment of the “Onchain Economy” exchange-traded fund (ETF). This development, revealed in a now-deleted social media comment by VanEck’s head of digital assets research, Matthew Sigel, represents a significant milestone in integrating blockchain-driven companies into mainstream investment avenues.

According to the SEC filing, the Onchain Economy ETF will focus on companies integral to the cryptocurrency and blockchain ecosystem. These include software developers, mining companies, crypto exchanges, infrastructure builders, payment firms, and other entities categorized as “Digital Transformation Companies.”

VanEck elaborated on its selection criteria, emphasizing the importance of fundamental analysis, market trends, strategic positioning within the digital asset ecosystem, and valuation metrics. While the fund plans to invest in digital asset-related instruments such as commodity futures contracts, it will not directly hold cryptocurrencies.

This approach aligns with regulatory preferences while allowing investors to gain exposure to the digital asset economy through more traditional financial products. By bridging the gap between institutional investment and blockchain technology, VanEck is further cementing its role as a pioneer in crypto-oriented financial products.

VanEck’s application comes amid heightened anticipation of a friendlier regulatory environment following the reelection of US President Donald Trump. Industry observers expect this political shift to pave the way for increased adoption of cryptocurrency ETFs and other digital asset-focused investment vehicles. The SEC, under anticipated new leadership, may adopt a more accommodative stance, enabling long-awaited approvals for various cryptocurrency-related funds.

A Wave of ETF Applications

VanEck’s move is part of a broader trend of financial firms rushing to establish crypto ETFs in anticipation of regulatory clarity.

In November 2024, digital asset manager Bitwise filed an application for the 10 Crypto Index Fund ETF, designed to track a diversified basket of cryptocurrencies, including Bitcoin (BTC), Ether (ETH), Solana (SOL), XRP, Avalanche (AVAX), Chainlink (LINK), Cardano (ADA), Bitcoin Cash (BCH), Uniswap (UNI), and Polkadot (DOT). 

In December 2024, WisdomTree entered the race with an application for an XRP-focused ETF, joining established players like 21Shares, Canary Capital, and Bitwise. Meanwhile, Grayscale Investments, known for its digital asset trusts, petitioned the SEC to convert its existing Grayscale Solana Trust into an ETF, signaling increasing confidence in blockchain networks like Solana.

The same month, REX Financial launched the REX Crypto Equity Premium Income ETF, employing a covered-call strategy targeting crypto stocks to generate steady income for investors.

More recently, Bitwise filed a proposal to list the Bitwise Bitcoin Standard Corporations ETF, which aims to invest in companies holding significant Bitcoin reserves, such as MicroStrategy and Tesla.

VanEck’s application and the broader wave of ETF filings shed light on the increasing mainstream acceptance of cryptocurrency as a legitimate asset class. These products are designed to offer retail and institutional investors a less volatile and more regulated way to gain exposure to the rapidly growing digital asset ecosystem.

For investors, the Onchain Economy ETF represents a strategic opportunity to participate in the blockchain industry’s expansion without directly managing cryptocurrencies. It also reflects growing confidence in the long-term viability of blockchain technology as a driver of economic transformation.

Despite the optimism, challenges remain. The SEC has historically been cautious in approving cryptocurrency ETFs, citing concerns over market manipulation, lack of transparency, and inadequate investor protections. However, the growing sophistication of crypto markets and the rising involvement of institutional players may address these issues, paving the way for broader acceptance.

VanEck’s application could serve as a litmus test for the SEC’s evolving approach to cryptocurrency investment products under its new leadership. Should the Onchain Economy ETF gain approval, it may signal a turning point for regulatory acceptance and open the floodgates for similar products.

US Regulators Delay Decision on Bitwise’s 10 Crypto Index Fund ETF

In related news, US regulators have opted to extend their decision-making timeline regarding the potential listing of Bitwise’s 10 Crypto Index Fund ETF on the New York Stock Exchange’s (NYSE) Arca platform. The delay, announced in a Jan. 14 regulatory filing, shows the ongoing scrutiny surrounding cryptocurrency-related financial products in the United States.

The proposed Bitwise 10 Crypto Index Fund ETF aims to provide investors with exposure to a diversified portfolio of cryptocurrencies. If approved, it would be the first US-based spot crypto ETF to offer holdings beyond Bitcoin and Ethereum, expanding into alternative cryptocurrencies, or “altcoins.”

The fund is designed to include a mix of major digital assets, including Bitcoin (BTC), Ether (ETH), Solana (SOL), XRP, Cardano (ADA), Avalanche (AVAX), Bitcoin Cash (BCH), Chainlink (LINK), Uniswap (UNI), and Polkadot (DOT). This broad portfolio reflects a strategic effort to appeal to investors seeking diversified exposure to the rapidly evolving cryptocurrency market.

The application to list the ETF was filed in December by NYSE Arca, and Bitwise has positioned the fund as a convenient, single-vehicle solution for those looking to invest in a range of top-performing cryptocurrencies.

The SEC’s decision to extend its review period shows the cautious approach US regulators have taken toward cryptocurrency ETFs. Historically, the SEC has cited concerns about market manipulation, liquidity, and investor protections as reasons for delaying or rejecting ETF applications.

Industry analysts suggest that crypto index ETFs represent the next frontier for asset managers after the successful launch of funds holding Bitcoin and Ethereum. These ETFs aim to replicate the simplicity and efficiency of traditional index funds, such as the S&P 500 ETF, by bundling multiple assets into a single, easy-to-access investment product.

Katalin Tischhauser, head of investment research at Sygnum Bank, highlighted the growing demand for such funds, noting, “The next logical step is index ETFs because indexes are efficient for investors — just like how people buy the S&P 500 in an ETF. This will be the same in crypto.”

This demand is driving competition among asset managers to bring innovative index ETFs to market. In November, NYSE filed to list the Bitwise Bitcoin and Ethereum ETF, which aims to balance exposure to the two largest cryptocurrencies. Similarly, Grayscale submitted a proposal in October for its Digital Large Cap Fund, designed to provide investors with exposure to a basket of major cryptocurrencies.

Other players, such as Hashdex and Franklin Templeton, are also entering the fray with their own crypto index fund proposals, creating a crowded field vying for regulatory approval.

Bitwise’s Broader ETF Strategy

Bitwise has positioned itself as a leader in cryptocurrency financial products, with multiple ETF proposals in the pipeline. In December, the company filed for the Bitwise Bitcoin Standard Corporations ETF, a fund aimed at investing in publicly traded companies holding significant Bitcoin reserves. According to the filing, eligible companies must hold at least 1,000 BTC in their corporate treasuries, embracing what Bitwise calls the “Bitcoin standard.”

While the SEC’s delay is not unexpected, it highlights the regulatory challenges facing the US cryptocurrency industry. The SEC’s cautious stance contrasts with developments in other jurisdictions, where crypto ETFs have gained traction. For example, Canada and several European countries have already approved a range of cryptocurrency ETFs, giving investors in those regions a head start in accessing diversified crypto exposure.

For the US market, the approval of Bitwise’s ETF could serve as a pivotal moment, signaling a shift toward broader acceptance of cryptocurrency as a legitimate asset class. If approved, the fund could attract significant institutional and retail investment, further integrating digital assets into mainstream financial markets.