US Government Resumption Could Unleash Crypto ETF Approvals

The US government's return to normal legislative operations following the shutdown could trigger a wave of new crypto exchange-traded fund (ETF) approvals by the Securities and Exchange Commission (SEC) in 2026, according to market analysts.

Matt Hougan, chief investment officer at Bitwise, stated to CNBC that there is “huge” demand for crypto ETFs and exchange-traded products (ETPs). He predicts “ETF-palooza in crypto land,” with over 100 launches expected, including single-asset and index-based crypto ETPs. Hougan anticipates that demand for crypto index ETFs will be driven by investors seeking small, passive crypto exposure. Crypto ETFs have the potential to redirect capital from traditional financial markets into digital assets, potentially driving prices higher. Some analysts believe that recent shifts in crypto market dynamics are attributable to capital inflows from these ETFs.

Crypto ETF Outflows Pressure Markets

Despite strong investor interest, significant capital outflows from crypto ETFs are adding downward pressure on cryptocurrency prices. Canary Capital’s XRP ETF (XRPC) launched with a record-breaking $58 million in first-day trading volume, making it the most successful ETF launch of 2025. Despite this impressive volume, the price of XRP (XRP) has declined by roughly 13% over the past week, according to CoinMarketCap.

Bitcoin (BTC) ETFs are facing similar headwinds, with approximately $1.1 billion in outflows so far in November, according to Farside Investors. This puts the investment vehicle on track for its worst month on record. Glassnode analyst Sean Rose reports that the total average cost basis for Bitcoin ETFs is around $89,600, a level that Bitcoin has recently fallen below, leaving the average ETF investor underwater.

Bloomberg ETF analyst Eric Balchunas noted that Bitcoin ETF investors remained resilient during October’s market crash, with the ETFs experiencing approximately $1 billion in outflows in the month following the crash. He attributed the majority of BTC sold during that period to long-term BTC whales. However, the crypto market’s decline has intensified, and ETF outflows have continued since his initial assessment.


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