Crypto Assets ETF application wave emerges: from public chain Token AVAX to Meme coin BONK, who will ultimately prevail?

On Tuesday, the U.S. Securities and Exchange Commission (SEC) welcomed a wave of cryptocurrency ETF applications, with five separate submissions covering a range from infrastructure tokens like Avalanche to meme coins like Bonk (BONK), which an analyst described as a "crazy" space. The emergence of these new applications reflects that fund issuers are actively exploring the diversity of investment products in crypto assets.

Multiple Types of Encryption ETFs Compete to Enter

According to Nate Geraci, co-founder of the ETF Institute, the lineup for this application includes:

• Bitwise's spot Avalanche ETF and a stablecoin with a tokenized ETF.
• Defiance ETFs are products built around Bitcoin and Ethereum basis trading.
• Tuttle's "Income Blast" series funds cover Bonk (BONK), Litecoin (LTC), and Sui (SUI).
• T-Rex's 2x leverage Orbs ETF.

These new applications have caused the number of crypto ETF applications currently pending with the SEC to surge to over 90.

Analyst's View: Which Product Is More Likely to Be Approved?

Pratik Kala, the head of research at Apollo Crypto, believes that "the spot AVAX ETF should have the highest chance of approval, as it is simpler compared to other products." In seeking the AVAX ETF, an institutional-grade investment product, Bitwise has joined the ranks of VanEck and Grayscale.

But Kala expressed skepticism about more "exotic" products, stating: "As far as I know, the basis trading ETF will be a first, so it will face stricter scrutiny." He was referring to Defiance ETFs' market-neutral Bitcoin and Ethereum funds, which execute hedge fund arbitrage strategies by buying spot ETFs and shorting futures contracts.

Sudhakar Lakshmanaraja, the founder of Digital South Trust, echoed Kala's view, stating that the SEC "is more likely to approve AVAX and stablecoin/tokenized ETFs," while products linked to Meme coins face greater challenges due to concerns about their "volatility and liquidity."

Tuttle Capital Management, managing over $3.6 billion in assets, has become the second U.S. fund management company to apply for a spot Bonk (BONK) ETF. Kala told Decrypt, "Products like 'Income Blast' targeting long-tail altcoins are also difficult due to their low options trading volume."

Market Outlook and Potential Risks

Pav Hundal, the chief analyst at Swyftx, believes that infrastructure Tokens like Avax are "close enough to Ethereum" and thus have a high approval chance, "Sui is the same." He pointed out that the SEC provided a "clear statement" in February that "Meme coins are not securities," which indicates that there will be more related applications in the future. However, Hundal expressed particular enthusiasm for the basis trading ETF, calling it "a highlight," as "no market-neutral products have been launched yet," and predicted that "this type of yield-generating fund may become very popular."

The emergence of this application wave coincides with the REX-Osprey Dogecoin ETF preparing to debut this week after passing the SEC review period. Kala believes that, considering the issuers are preparing for the "largest wealth transfer from the baby boomer generation to the younger generation," and that "Meme plays an important role in investment," the SEC is considering ETF applications for long-tail crypto assets and Meme coins, which is "very crazy."

Conclusion

The recent wave of Crypto Assets ETF applications reflects the industry's strong desire to offer diversified investment products. Although applications have been submitted for various types, from infrastructure Tokens like AVAX to Meme coins like BONK, the review standards of regulatory agencies remain crucial. The market is closely watching how the SEC balances innovation and investor protection, which will not only determine the fate of these ETFs but also set the tone for the future development of crypto financial products.