The conclusion of the US government shutdown and the resumption of normal legislative activities are anticipated to pave the way for a significant increase in new cryptocurrency exchange-traded fund (ETF) approvals by the Securities and Exchange Commission (SEC) in 2026, according to market analysts.
Matt Hougan, chief investment officer at investment firm Bitwise, highlighted the substantial demand for crypto ETFs and exchange-traded products (ETPs) in a recent interview. He stated:
“It's going to be ETF-palooza in crypto land. I think there will be 100-plus launches. We're going to see a lot of single-asset crypto ETPs. What I'm most excited about, though, is the growth of index-based crypto ETPs.”
Hougan further explained that investor interest in crypto index ETFs will be fueled by a desire for a modest, passive allocation to cryptocurrencies.
Crypto ETFs play a crucial role in channeling capital from traditional financial markets into digital assets, which can contribute to price appreciation. Some market observers attribute the evolving dynamics of the crypto market structure to the capital flows originating from these ETFs.
Crypto ETFs Experience Outflows, Increasing Market Pressure
Despite sustained investor interest, significant capital outflows from cryptocurrency ETFs are currently exerting additional downward pressure on cryptocurrency prices.
Canary Capital’s XRP ETF (XRPC) experienced a strong debut on Thursday, generating $58 million in first-day trading volume, marking it as the most successful ETF launch of 2025. However, following this record trading volume, the price of XRP has seen a decline of approximately 13% over the past week.
Bitcoin (BTC) ETFs are reflecting a similar trend. According to Farside Investors, approximately $1.1 billion has flowed out of Bitcoin ETFs so far in November, placing the investment vehicle on track for its worst month on record.
The average cost basis for Bitcoin ETFs is around $89,600. Bitcoin's price fell below this level on Tuesday, indicating that the average ETF investor is now underwater, as noted by Sean Rose, an analyst at crypto market analysis platform Glassnode.
Even after October’s market downturn, Bitcoin ETF investors maintained their positions. However, in the month following the crash, these ETFs saw outflows totaling approximately $1 billion, according to Eric Balchunas, a senior ETF analyst at Bloomberg.
Balchunas previously stated that long-term BTC whales were responsible for the majority of BTC sold during October and November. Since his comments, the crypto market has continued its decline, and ETFs have persisted in experiencing capital outflows.