The U.S. Securities and Exchange Commission (SEC) persists with its cautious stance on cryptocurrency-based exchange-traded funds (ETFs). Recently, the SEC postponed decisions on spot ETF applications focusing on XRP, Solana 
$144, and Dogecoin 
$0.000306 to a future date. Bloomberg’s senior ETF analyst, James Seyffart, suggested these decisions could be delayed until late 2025. Developments in the futures markets are expected to significantly influence these spot ETF approvals.
SEC Delays Decision for In-Depth Examination
In a statement released on May 21, the SEC announced that it would incorporate public opinion in its evaluation process for ETF applications from 21Shares and Grayscale for XRP and Dogecoin. The SEC is also considering applications from VanEck, Bitwise, 21Shares, and Canary Capital for Solana ETFs. This indicates that the approval process might take longer than initially anticipated. The commission aims to clarify whether these funds carry risks of fraud and market manipulation before taking any definitive steps.
The SEC’s cautious approach is not unprecedented. Previously, the regulatory body took a similar path concerning spot Bitcoin 
$0.000073 ETFs, engaging in an extended evaluation phase before granting approval. Now, a similar approach is applied to the highly demanded cryptocurrencies like XRP, Solana, and Dogecoin. Despite their high trading volumes, certain technical specifications of these cryptocurrencies do not yet meet SEC standards, leading to postponed decisions. Emphasis on investor protection plays a central role in the commission’s decision-making process.
Futures Markets Could Accelerate Approval Process
Recently, the Chicago Mercantile Exchange (CME) officially launched XRP Futures and Micro XRP Futures contracts. This development provides alternative investment avenues for crypto investors and hints at the increased legal framework in futures markets. A similar effect was observed during the 2023 court proceedings concerning Grayscale’s Bitcoin ETF application, where futures presence paved the way for spot ETF approval.
Futures create safe and traceable infrastructures for regulatory bodies, becoming a critical criterion for assessing spot ETFs. Cryptocurrencies generating volume in derivative markets, like XRP, establish a more solid foundation for converting into spot investment products. Additionally, derivatives allow investors to manage risks, supporting market transparency.
The process involves not only technical reviews but also public opinions and the demands of market participants. The SEC’s current approach highlights its preference for thorough and multifaceted analysis over hasty decisions. This stance indicates a similar scrutiny process will be adopted for new ETF applications in the future.
