USDREX, Osprey and Defiance Flood SEC With 27 Altcoin ETF Filings as New Rules Take Effect
Altcoin ETF Race Heats Up Amid SEC Delays and Government Shutdown
TL;DR
- REX/Osprey filed 21 spot altcoin ETF applications with staking features; Defiance submitted 6 leveraged products.
- SEC’s new listing standards lower barriers but review process is stalled by the U.S. government shutdown.
- October 2025 marks a decisive month with 16 pending ETF deadlines under the new framework.
REX Shares and Osprey Funds have submitted 21 spot crypto ETF applications, each tied to a single digital asset, in a wave of filings that signal growing pressure to bring altcoin-based exchange-traded products to U.S. markets. The products include staking features across tokens such as Cardano (ADA), Avalanche (AVAX), Polkadot (DOT), Near Protocol (NEAR), Sei (SEI), Sui (SUI), Bittensor (TAO), and Hype (HYPE), with structures that would allow up to 40% of assets to be allocated to foreign-listed exchange-traded products via Cayman subsidiaries. These provisions reference offshore issuers including 21Shares, CoinShares, and Valour, and are designed to maintain regulated exposure to crypto assets while aligning with domestic requirements.
Defiance joined the surge by filing six leveraged crypto ETF applications, evenly split between long and short exposure to Bitcoin, Ethereum, and Solana. Each product aims for 3× leverage, though current leveraged ETP rules limit issuers to 2×, prompting analysts to note that Defiance may attempt to achieve higher leverage through options strategies. Bloomberg’s James Seyffart said the move “isn’t really allowed by the new leveraged ETP rules,” but noted that creative structuring could still position the products for approval. Together, the two issuers filed 27 ETFs on October 3, 2025, underscoring the pace at which crypto investment vehicles are expanding beyond Bitcoin and Ether.
The filings follow the SEC’s September 17 decision to adopt generic listing standards for spot commodity-tied exchange-traded products, a structural change that removes the need for case-by-case 19b-4 rule changes. This reform shifts the bottleneck from bespoke approvals to the speed at which issuers can clear S-1 filings and have registration statements declared effective. Analysts suggest the streamlined process could accelerate product launches across the sector once the SEC resumes normal operations. The government shutdown has left the Commission operating with reduced staff, halting the effectiveness of pending filings. Bloomberg analyst Eric Balchunas described the situation as “like a rain delay,” freezing momentum despite the new regulatory framework.
October remains pivotal as 16 ETF applications face deadlines under the updated system. Analysts argue that altcoin ETFs will not match Bitcoin’s historic inflows but can still attract steady demand. Seyffart predicted the market could soon see staking Solana ETFs, covered call strategies, and further leveraged or inverse products, saying, “It’s going to get crazy.” He emphasized that while individual altcoin ETFs may succeed in capturing assets under management, the long-term growth narrative may favor basket or index products that better reflect the broader coin market cap.
The filings highlight issuers’ belief that investor appetite extends beyond Bitcoin and Ether, targeting assets with significant presence in the crypto price index. However, risks remain. Leveraged filings push against existing rules, Cayman subsidiary structures add regulatory and tax complexity, and the government shutdown delays progress. Still, the influx of applications underscores how quickly crypto financial products are evolving under the SEC’s new framework. Whether demand for altcoin ETFs translates into meaningful inflows will depend on how these vehicles perform once approvals resume, setting new benchmarks for staking rewards, leveraged exposure, and long-term strategies in a rapidly changing market for crypto price instruments.
This article has been refined and enhanced by ChatGPT.
