U.S. SEC seeks comment on rules for next-generation ETFs

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SEC seeks comment on ETFs

Highlights

SEC opened a 60-day comment period to assess regulatory adequacy for ETFs using novel asset classes and investment strategies amid market innovation.
ETF assets under management surged from about $4 trillion in 2019 to over $12 trillion projected by end-2025, intensifying scrutiny of existing regulatory frameworks.
Recent launches—like ProShares GENIUS Money Market ETF, Grayscale Hyperliquid Staking ETP, and Bitwise’s Bitcoin–gold ETF—exemplify issuer expansion into specialized, mixed-asset crypto strategies.

Consultation on innovative ETF structures

As reported by Cointelegraph, the U.S. Securities and Exchange Commission is requesting public comment on exchange-traded funds that invest in novel asset classes or use new investment strategies. The agency is examining whether existing rules adequately address these products, how such funds should be regulated and whether the registration process needs to change as new offerings enter the market.

The comment period remains open for 60 days after publication in the Federal Register, giving market participants time to respond before the SEC considers possible regulatory changes. The request also follows another recent consultation by U.S. market regulators, after the SEC and the Commodity Futures Trading Commission last week sought feedback on harmonizing portfolio margin rules across securities and derivatives markets.

ETF assets under management have grown from about $4 trillion in 2019 to more than $12 trillion at the end of 2025, according to the SEC. That expansion is putting more attention on whether long-standing rules remain appropriate for products built around newer structures and exposures.

Crypto product innovation broadens market pressure

Crypto ETF issuers in recent months are moving beyond straightforward price-tracking products and launching funds linked to staking, stablecoin reserves and other specialized strategies. In June, ProShares introduced the GENIUS Money Market ETF, a Treasury-focused fund designed around reserve assets permitted under the GENIUS Act for payment stablecoins, while Grayscale launched the Hyperliquid Staking ETP tied to HYPE and aimed at generating staking rewards.

Bitcoin investment products are also becoming more specialized. BlackRock proposed an options-based Bitcoin income ETF in January, Goldman Sachs followed in April with a fund combining spot Bitcoin products and covered-call strategies, and Franklin Templeton earlier this month proposed two ETFs that systematically reinvest stock dividends into Bitcoin-linked investments through instruments including exchange-traded products, futures, options and Bitcoin-backed depositary receipts.

Issuers are also testing mixed portfolios that combine digital assets with traditional holdings. Bitwise in January launched an actively managed ETF pairing Bitcoin with gold, precious metals and mining equities, highlighting how product design is broadening across both crypto and conventional asset classes.

In our earlier article on Circle (CRCL) stock, we outlined how the company came under sharp pressure amid intensified competition in the stablecoin market and uncertainty around future market share. We also noted that Circle’s removal from several Russell Growth indexes could weigh on passive inflows, while selective institutional support (including its expanded partnership with BNY Mellon) offered some longer-term offset despite weak near-term technicals.

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