Original Title: "The Explosion of Shanzhai ETFs: Completing a Decade of Bitcoin's Journey in Just Six Months: A Structural Transformation is Happening in the Crypto Market"
Original Author: Clow, Blockchain in Plain Language
Bitcoin ETFs took nearly a decade to be approved, while altcoins only took six months.
In November 2025, something incredible happened on Wall Street. Solana, XRP, Dogecoin—these altcoins, once regarded by mainstream finance as "speculative toys," collectively landed on the New York Stock Exchange and Nasdaq in just a few weeks, transforming into regulated ETF products.
Even more fantastical is that these ETFs were not individually approved by the SEC but instead utilized a new "Universal Listing Standard" and a little-known "8(a) clause" fast track, coming into effect almost with the tacit approval of regulatory agencies.
The rules of the game are being completely rewritten.
Strategic Abandonment of Regulation
For a long time, the SEC's attitude towards cryptocurrency ETFs can be summarized in four words: drag it out.
Every new crypto ETF application requires the trading platform to submit a rule change request, with the SEC having a review period of up to 240 days, often rejecting applications at the last minute on the grounds of "market manipulation risk." This "enforcement regulation" has left countless applications in limbo.
But on September 17, 2025, everything suddenly changed.
The SEC approved the proposed amendments to the "Universal Listing Standard" put forward by three major trading platforms. This seemingly technical adjustment actually opened a door for altcoin ETFs: crypto assets that meet specific conditions can be listed directly without individual approval.
The core admission criteria are simple:
· Either, the asset has at least six months of trading history in a CFTC-regulated futures market, and the trading platform has a monitoring agreement with that market;
· Or, there is already a precedent of an ETF holding at least 40% exposure to that asset.
As long as one of these conditions is met, altcoin ETFs can take the "fast track." Solana, XRP, and Dogecoin all happen to meet the standards.
Even more aggressively, issuers found another "accelerator"—the 8(a) clause.
Traditional ETF applications typically include a "delay amendment" clause, allowing the SEC to review indefinitely. However, in the fourth quarter of 2025, issuers like Bitwise and Franklin Templeton began removing this clause from their applications.
According to Section 8(a) of the Securities Act of 1933, if the registration statement does not contain language delaying its effectiveness, the document will automatically take effect 20 days after submission, unless the SEC actively initiates a stop order.
This posed a choice for the SEC: either find sufficient reason to halt it within 20 days or watch the product go live automatically.
Due to staff shortages caused by government shutdowns, along with pressures from judicial rulings like the Ripple case and Grayscale case, the SEC was almost powerless to handle hundreds of backlog applications. More importantly, on January 20, 2025, SEC Chairman Gary Gensler resigned, leaving the entire regulatory agency in a "lame duck" state.
Issuers seized this once-in-a-lifetime window and rushed forward.
Solana ETF: A Bold Attempt at Staking Returns
With the technological halo of a high-performance public chain, Solana became the third "blue-chip" asset to be ETF-ified after BTC and ETH.
As of November 2025, six Solana ETFs have been listed, including Bitwise's BSOL, Grayscale's GSOL, and VanEck's VSOL. Among them, Bitwise's BSOL is the most aggressive—it not only provides exposure to SOL prices but also attempts to allocate on-chain returns to investors through a staking mechanism.
This is a bold attempt. The SEC has long viewed staking services as securities issuance, but Bitwise clearly labeled it as a "Staking ETF" in the S-1 filing, trying to design a compliant structure to allocate staking returns. If successful, this would allow the Solana ETF to capture price increases while also providing cash flow similar to "dividends," making it far more attractive than the non-yielding Bitcoin ETF.
Another point of contention is that Solana does not have futures contracts on the CME. According to the SEC's historical logic, this should have been a reason for rejection. However, the regulatory body ultimately approved it, possibly indicating their recognition that the long trading history of regulated platforms like Coinbase is sufficient for effective price discovery.
Market performance has also been impressive.
According to SoSoValue data, the Solana ETF recorded net inflows for 20 consecutive days since its launch, totaling $568 million. While Bitcoin and Ethereum ETFs faced massive net outflows in November, the Solana ETF attracted capital against the trend. By the end of November, the total assets under management of the six Solana funds had reached $843 million, accounting for approximately 1.09% of SOL's market capitalization.
This indicates that institutional funds are rotating assets, withdrawing from crowded Bitcoin trades in search of emerging assets with higher Beta and growth potential.
XRP ETF: Value Reassessment After Regulatory Settlement
The path to XRP's ETF has long been obstructed by legal disputes between Ripple Labs and the SEC. After both parties reached a settlement in August 2025, the sword of Damocles hanging over XRP finally fell, leading to a surge in ETF applications.
As of November, five XRP ETFs have been listed or are about to be listed:
Bitwise's XRP ETF was listed on November 20, directly using "XRP" as the trading code. This bold marketing strategy sparked controversy—some believe it is a genius move that allows retail investors to directly locate it during searches; others criticize it for confusing the underlying asset with the derivative fund.
Canary's XRPC was the first to list on November 13, recording a record inflow of $243 million on its first day.
Grayscale's GXRP was listed on November 24, converted from a trust, eliminating the premium/discount issue.
Despite strong initial inflows, XRP's price came under short-term pressure after the ETF listing. Within days of the Bitwise ETF's launch, XRP's price fell by about 7.6%, at one point dropping over 18%.
This is a typical case of "buy the rumor, sell the news." Speculative funds bought in advance when expectations for ETF approval formed, and after the news landed, they took profits. Macroeconomic factors (such as strong employment data leading to reduced interest rate expectations) also suppressed the overall performance of risk assets.
However, in the long run, the ETF has introduced sustained passive buying for XRP. Data shows that the XRP ETF has recorded cumulative net inflows of over $587 million since its launch. Speculators are retreating, but allocation-focused institutional funds are entering, building a higher long-term bottom for XRP's price.
Dogecoin ETF: From Meme to Asset Class
The ETF-ification of Dogecoin marks an important turning point: Wall Street has begun to accept "Meme coins" based on community consensus and network effects as legitimate investment targets.
Currently, there are three Dogecoin-related products:
Grayscale's GDOG was listed on November 24;
Bitwise's BWOW has submitted an 8(a) application and is awaiting automatic effectiveness;
21Shares' TXXD is a 2x leveraged product aimed at high-risk investors.
Market reaction has been relatively tepid. GDOG's first-day trading volume was only $1.41 million, with no net inflows recorded. This may stem from the highly retail-oriented nature of the Dogecoin investor community—they tend to prefer holding tokens directly on trading platforms rather than paying management fees through ETFs. However, the market generally expects Bitwise's BWOW to activate institutional demand in this sector with lower fees and stronger marketing capabilities.
The Next Wave: Litecoin, HBAR, and BNB
Beyond the three popular altcoins, Litecoin, Hedera (HBAR), and BNB are also actively seeking ETF status.
Litecoin, as a code fork of Bitcoin, is considered closest to BTC in regulatory attributes and is viewed as a commodity. Canary Capital submitted an application in October 2024 and filed the 8-A form (the final step for trading platform registration) on October 27, 2025, indicating that the LTC ETF listing is imminent.
The HBAR ETF application is led by Canary, with Grayscale following up. A key breakthrough occurred when Coinbase Derivatives launched CFTC-regulated HBAR futures contracts in February 2025, providing the necessary regulatory market foundation for HBAR to meet the "Universal Listing Standard." Nasdaq has submitted a 19b-4 filing for Grayscale, indicating that HBAR is very likely to become the next approved asset.
BNB, however, presents the most challenging attempt. VanEck submitted an S-1 application for VBNB, but given BNB's close ties to the Binance trading platform and Binance's previous complex entanglements with U.S. regulators, the BNB ETF is seen as the ultimate test of the new leadership's regulatory stance at the SEC.
The "Crypto Multiplier" Effect: A Double-Edged Sword of Liquidity
The launch of altcoin ETFs not only increases investment codes but also changes the entire market through structural capital flows.
The Bank for International Settlements (BIS) research introduced the concept of "Crypto Multiplier": the market capitalization of crypto assets responds non-linearly to capital inflows. For altcoins with liquidity far below Bitcoin, the institutional funds brought by ETFs could create significant price impacts.
According to Kaiko data, Bitcoin's 1% market depth is currently about $535 million, while most altcoins have market depths only a fraction of that. This means that an equivalent scale of capital inflow (such as the $105 million on the first day of the Bitwise XRP ETF) should theoretically have a much greater impact on XRP's price than on BTC.
The current "sell the news" phenomenon obscures this effect. Market makers need to buy spot in the early stages of ETF subscriptions, but if overall market sentiment is bearish, they may use the futures market to hedge by shorting or digest inventory in the over-the-counter market, suppressing spot price increases in the short term.
But as the ETF asset scale accumulates, this passive buying will gradually drain liquidity from trading platforms, leading to more severe price fluctuations in the future, with an upward tendency.
Market Segmentation: A New Valuation System
The launch of ETFs has intensified the liquidity segmentation in the crypto market:
First Tier (ETF Assets): BTC, ETH, SOL, XRP, DOGE. These assets have compliant fiat entry points, allowing registered investment advisors (RIAs) and pension funds to allocate without barriers. They will enjoy a "compliance premium" and lower liquidity risks.
Second Tier (Non-ETF Assets): Other Layer 1 and DeFi tokens. Due to the lack of ETF channels, these assets will continue to rely on retail funds and on-chain liquidity, which may reduce their correlation with mainstream assets and face the risk of marginalization.
This differentiation will reshape the entire valuation logic of the crypto market, shifting from speculation-driven to a multipolar valuation based on compliance channels and institutional allocations.
Summary
The wave of altcoin ETFs at the end of 2025 marks a decisive step for crypto assets from "marginal speculation" to "mainstream allocation."
By cleverly utilizing the "Universal Listing Standard" and the "8(a) clause," issuers have successfully breached the SEC's defenses, bringing controversial assets like Solana, XRP, and Dogecoin into regulated trading platforms.
This not only provides a compliant funding entry for these assets but, more importantly, has effectively confirmed their "non-security" status legally.
Although facing profit-taking pressure in the short term, as institutional investors begin to allocate 1%-5% positions for these assets in their models, structural capital inflows will inevitably drive up the valuations of these "digital commodities."
In the next 6-12 months, we will see more assets (such as Avalanche and Chainlink) attempt to replicate this path.
In a multipolar crypto market, ETFs will become the most important watershed distinguishing "core assets" from "marginal assets."
For investors, this transformation brings not only investment opportunities but also a complete restructuring of the market landscape: a market once driven by speculation and narratives is evolving towards a new order anchored in compliance channels and institutional allocations.
This process is already irreversible.
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