Crypto ETF Boom May End In Mass Liquidations: Analyst

A surge of crypto ETF (exchange-traded fund) launches in 2026 could lead to widespread liquidations later, Bloomberg ETF analyst James Seyffart warned.

Seyffart highlighted in Dec. 17 comments on X that research from crypto asset manager Bitwise projects more than 100 crypto ETFs could launch next year.

He also noted that 126 ETF filings are currently awaiting SEC approval, adding, “Issuers are throwing A LOT of product at the wall.”

The risk is that supply outstrips demand, making it difficult for many products to achieve a sustainable level of assets under management, particularly if the crypto market stays in a funk.

“We’re going to see a lot of liquidations in crypto ETP products,’’ he said. ‘’Might happen at tail end of 2026 but likely by the end of 2027.”

I’m in 100% agreement with @BitwiseInvest here. I also think we’re going to see a lot of liquidations in crypto ETP products. Might happen at tail end of 2026 but likely by the end of 2027. Issuers are throwing A LOT of product at the wall — there’s at least 126 filings https://t.co/eOmeUIKXFZ pic.twitter.com/UELUKUng7Y

— James Seyffart (@JSeyff) December 17, 2025

SEC Generic Listing Standards Make It Easier For New Products To Launch

Seyffart’s warning and Bitwise’s 2026 ETF boom prediction follow a September decision by the US Securities and Exchange Commission (SEC) to approve generic listing standards for crypto ETFs.

This enables national securities exchanges such as the New York Stock Exchange (NYSE), Nasdaq, and Cboe, to list certain commodity-based ETPs (exchange-traded products) tied to cryptos. 

Before approving the generic listing standards, the SEC had reviewed every crypto ETF application on a case-by-case basis. This process was slow and unpredictable, and subsequently served as a bottleneck for issuers and managers that wanted to launch new products. 

Now, the new standards change the process by setting rule-based, objective criteria. This is similar to how many traditional commodities ETFs are listed. 

Given that the new generic listing standards streamline the process, multiple issuers have filed to launch products for a range of cryptos with the goal of repeating the success of the spot BTC and spot ETH funds in the US. 

The funds were expected to ignite a crypto market rally earlier in the year, but the US government shutdown had stalled momentum for the market. 

Crypto ETFs Could Repeat The Trend Seen In The TradFi Space

The warning of a crypto ETF boom and subsequent liquidations also comes after several funds in the traditional finance space failed to take off. 

Last year, a total of 622 ETFs closed down. This included 189 funds in the US, according to a report from The Daily Upside last month.  Morningstar also reported in January 2024 that the 244 ETFs that had closed in the US in 2023 only had an average age of 5.4 years. 

Many of those ETFs had shut down because they failed to attract sufficient inflows, which ultimately led to low assets under management. 

Indications that the trend could make its way to the crypto market have already emerged this year. In 2025, several crypto products have been liquidated. Among them is the ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY) and the ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC).

Altcoin ETFs Lag Behind Older Spot Bitcoin Funds

Spot Bitcoin ETFs launched in the US towards the start of 2024, and have since seen more than $57.7 billion of net inflows. BlackRock’s IBIT has led the charge with its net cumulative inflows of over $62.6 billion, data from Farside Investors shows. 

US spot BTC ETF flows (Source: Farside Investors)

Spot ETH ETFs, launched a few months after, have seen only $12.636 billion in cumulative net inflows. 

Earlier this year, spot SOL ETFs debuted in the market as well, but have only attracted $725 million in total inflows. 

Spot XRP ETFs are the youngest products in the market and appear to have bucked the trend seen with altcoin products. Following a multi-day inflows streak since their debut, the spot XRP ETFs have already managed to surpass $1.1 billion in total net assets. 

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