The market for cryptocurrency exchange-traded funds (ETFs) is expanding, with recent developments indicating an increased interest among asset managers and exchanges. Nasdaq has submitted an application to the US Securities and Exchange Commission (SEC) for the Canary HBAR ETF, which would be backed by Hedera Network’s native token, HBAR. This filing enhances the momentum seen in the crypto ETF sector, where a growing number of other issuers have also expressed intent to launch altcoin ETFs.
The proposal for the HBAR ETF was put forth by Canary Capital, which initially sought SEC approval back in November. The ETF aims to give investors access to HBAR, a token that supports Hedera’s hashgraph technology. In addition to HBAR, Canary Capital has been exploring opportunities for ETFs linked to various other altcoins, which reflect the increasing interest and demand for cryptocurrency investment products.
The newly submitted filing is part of a broader trend, as other issuers have formalized their applications for ETFs associated with cryptocurrencies like Polkadot and even novelty tokens such as a Trump-themed cryptocurrency. Furthermore, asset managers are seeking the SEC’s regulatory approval for adjustments to existing ETFs, which may include features like staking options and in-kind redemptions.
The SEC’s perspective on cryptocurrency regulation has notably shifted recently, particularly after changes in the political landscape. Following the second term of the former President, the regulatory body has allowed for the launch of crypto index ETFs, including a new product by Franklin Templeton that holds both Bitcoin and Ether, marking a significant development in this emerging market.
Market analysts predict that more ETF approvals will follow in the next several months as regulatory attitudes evolve. Bloomberg Intelligence has provided estimates regarding the likelihood of approval for various cryptocurrency ETFs; for example, it estimates a 65% chance for an XRP ETF and a 90% likelihood for Litecoin ETFs, with a 70% chance for Solana. However, the prospects for HBAR ETFs remain uncertain, and the regulatory outlook has yet to be fully assessed.
Historically, the SEC maintained a restrictive approach to cryptocurrency products. Under previous administrations, numerous lawsuits were initiated against crypto firms, encountering claims of securities law violations. However, in 2024, the SEC began permitting spot Bitcoin ETFs while consistently rejecting proposals for ETFs associated with different cryptocurrencies. The recent Oculus HBAR ETF filing, along with numerous applications for altcoin ETFs, is creating pressure on the SEC to reconsider its stance and broaden the investment landscape for digital assets.
If the current trend toward approvals continues, investors may soon benefit from a diverse array of options for participating in the digital asset market through regulated financial channels. The ongoing developments in the world of cryptocurrency ETFs suggest a promising shift in access and acceptance for these financial products.