The U.S. Securities and Exchange Commission has cleared a path for spot cryptocurrency exchange-traded funds through new generic listing standards. These rules remove major regulatory hurdles and place assets like Shiba Inu in direct contention for ETF approval. The development is thrilling to those who support digital asset investment products, and this competition is expected to intensify.
SEC Guidelines Position SHIB for ETF Eligibility
The SEC’s guidelines allow exchanges to list crypto ETPs without a lengthy approval process if the underlying asset has a futures contract traded for at least six months on a CFTC-regulated exchange. This shift streamlines the approval structure, signaling a new phase for crypto-based investment products in the United States.
Shiba Inu qualifies under these standards. According to a market notice from Coinbase Derivatives, “1k Shib (SHB)” futures began trading on July 15, 2024. Having surpassed 14 months of trading activity, SHIB futures exceed the SEC’s six-month mandate. This places the token in the same category as assets such as Solana and Polkadot, which also meet eligibility requirements for spot ETF consideration.
For the Shiba Inu community, which has consistently pushed for wider institutional recognition, the SEC’s decision marks an important milestone. A spot SHIB ETF is now a regulatory possibility, moving closer to reality after years of advocacy. However, industry participants caution that the new framework does not guarantee long-term success for every product that makes it to market.
Market Competition Raises Investor Concerns
Greg Benhaim, Executive Vice President of Product at 3iQ, addressed the implications of these developments in a note shared with The Shib Daily. Drawing from his company’s experience as an ETF issuer in Canada, Benhaim said the landscape could become more challenging for both issuers and investors.
“At first glance, this seems bullish for the industry,” Benhaim stated. “However… it may be challenging for issuers to raise capital when new products are being listed every single day.” He warned that the sheer number of ETFs entering the market could overwhelm retail participants.
Benhaim added that investors may struggle to understand the differences between various offerings. “For example, an AVAX ETF and an ADA ETF are very different, but the investor may not appreciate this fully,” he explained. He noted that distinguishing between assets in an ETF format requires a level of market knowledge that many retail investors may lack.
The SEC’s changes shift responsibility from regulators to the market itself. As Benhaim observed, competition will now determine which assets succeed in attracting significant retail interest. The proliferation of ETFs, he argued, will ultimately “pave the way for the industry to identify which assets have significant retail appeal in ETF format and which don’t.”
