Key SEC decisions on the launch of new cryptocurrency funds, including Bitcoin ETF and Ethereum ETF, are under threat. A possible US government shutdown could paralyze the regulator’s work and temporarily halt the process of approving ETF applications.
Why this matters for the cryptocurrency market
Demand for cryptocurrency investment products continues to grow. SEC approval of spot ETFs for bitcoin and ether has become a major breakthrough for the industry: new rules have simplified the registration process and replaced the ‘one fund — one approval’ model.
Now exchanges can list products faster, opening the way for the appearance of Litecoin ETF, Solana ETF, and funds based on other altcoins.
But the budget crisis in the US Congress could halt the work of agencies. If the budget is not passed by midnight, the SEC will be forced to switch to ‘minimum staff’ mode, and all new approvals will be frozen.
What impact will the shutdown have on the SEC
According to the SEC’s operational plan, in the event of a shutdown, the commission will not be able to:
- review new applications for cryptocurrency ETFs
- check documents and provide official clarifications
- approve the registration of investment products
- issue ‘no-action’ letters
Thus, the review of applications for Solana ETF, XRP ETF, and other cryptocurrency funds currently in process will be postponed indefinitely.
What experts say
Matt Hougan, Chief Investment Officer at Bitwise, stated directly:
‘If the government goes into shutdown, no new ETFs will be approved.’
A source familiar with the situation told Blockworks that approval of any applications with a limited staff is virtually impossible.
However, many experts emphasize that this is a temporary pause. Fireblocks’ Chief Legal Officer Jason Allegrante noted:
‘Yes, the SEC will suspend part of its work, but demand for cryptocurrency ETFs is only growing. After the regulator resumes work, it will continue from where it left off.’
Consequences for investors
For retail and institutional investors, the delay means a postponed launch of new investment products. This may temporarily reduce market activity and slow the inflow of institutional capital.
However, the very fact that the SEC has already approved unified rules for cryptocurrency ETFs gives confidence: the launch of new funds is only a matter of time.
Political context
President Donald Trump on Tuesday acknowledged that the likelihood of a government shutdown is ‘very high.’ The standoff between Democrats and Republicans over the budget has become a direct threat to financial markets.
What’s next?
Even if the approval of new ETFs is delayed by several weeks, the strategic outlook remains the same. Demand for Bitcoin ETF, Ethereum ETF, and potential funds for other cryptocurrencies will continue to grow, and new SEC rules have simplified the process of their launch.
The industry expects that in the coming months the market will see new products capable of attracting billions of dollars in institutional capital.
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