The U.S. government appears poised to end its shutdown this week. While this is generally positive news for most markets, it may present a slowdown for the crypto ETF sector.
A crypto ETF provides investors with a way to purchase cryptocurrencies like Bitcoin or XRP through the stock market, without the need to directly own the digital assets themselves.
Currently, three cryptocurrencies—XRP, LINK, and DOGE—are drawing significant market attention. Their ETF filings experienced rapid progression during periods of government closure, but with offices set to reopen, the review process is expected to lengthen.
Shutdown Deal Could Slow Crypto ETF Progress
During the government shutdown, the Securities and Exchange Commission (SEC) operated with a reduced staff. This limited capacity allowed certain ETF applications to potentially proceed automatically if they were not reviewed within statutory timelines.
This scenario, while uncommon, can occur when the SEC is not fully staffed. Lawmakers are now working towards a resolution that would officially reopen government operations.
Should the deal pass this week, the SEC will revert to its full review capacity, which will consequently lead to more thorough checks and a slower approval process.
For traders, the timing of these events is crucial. If the shutdown extends for a few more days, it is possible that one or two ETFs could still gain early clearance. However, if the shutdown concludes immediately, pending approvals may be deferred to December or later.
XRP, LINK, and DOGE ETFs Are Close to Approval
The Canary XRP ETF appears to be the closest to launching. Bloomberg analyst Eric Balchunas has confirmed that Canary has submitted a Form 8-A, which is the final prerequisite before an ETF can be listed on an exchange like the Nasdaq.
This regulatory form enables a company to officially register its ETF shares for trading. If all aspects are satisfactory, the XRP ETF could potentially become available as early as Thursday.
Concurrently, Bitwise, a prominent investment firm specializing in crypto funds, is preparing multiple ETF products, including those for DOGE and Chainlink (LINK).
Bitwise’s LINK ETF, designated with the ticker CLNK, has already been listed on the DTCC listing system.
The Depository Trust & Clearing Corporation (DTCC) serves as the primary entity responsible for clearing and settling trades within the U.S. financial markets. Inclusion on its list does not signify immediate approval but indicates that the necessary trading infrastructure is being prepared in advance.
According to data compiled by Bloomberg, over 155 crypto ETF applications have been submitted since 2024. Solana and Bitcoin lead this trend with 23 filings each, followed by XRP with 20, and Ethereum with 10.
This activity underscores the swift pace at which traditional financial institutions are moving to introduce products linked to digital currencies.
Crypto ETF: Market Watches What Happens Next
The Senate is anticipated to vote on the shutdown deal in the near future, possibly by Wednesday. If the deal is ratified, the SEC will resume its standard operations, thereby ending the brief period of expedited ETF progress.
This resumption of normal procedures could result in slower approvals for the XRP, LINK, and DOGE ETFs, at least in the short term. It is also noteworthy that the current price performance of these tokens is not exceptionally strong.
With DOGE struggling to maintain the $0.17 level and XRP trading below $2.50, a delay in ETF approvals might trigger a sentiment-driven price decline.
Nevertheless, even a single early approval could bolster market confidence. ETFs often attract significant institutional investment, which can lead to increased capital flowing into the cryptocurrency market and contribute to price appreciation.
If these ETFs face further delays, traders may adopt a more cautious stance until new decisions are finalized. In essence, the next significant movement in the cryptocurrency market could be influenced by the timing of this government shutdown resolution.
A swift end to the shutdown might lead to a pause in crypto ETF approvals. Conversely, if the shutdown persists, specific coin-based ETFs such as those for XRP, LINK, or DOGE could potentially receive approval, offering a surprise boost to the market.