The U.S. Securities and Exchange Commission (SEC) is facing renewed pressure as financial issuers push for exchange-traded funds (ETF) tied to alternative cryptocurrencies, including Avalanche (AVAX), Sui (SUI), and the meme-inspired Bonk (BONK). Market analysts indicate these proposals are testing the regulatory body’s tolerance for products linked to more speculative digital assets beyond Bitcoin and Ethereum.
According to industry experts, AVAX-based ETFs currently hold the highest likelihood of approval among this new wave of filings, though all face significant regulatory hurdles. The SEC has historically been cautious in greenlighting funds tied to altcoins, citing concerns over market manipulation, liquidity, and investor protection.
Basis trading ETFs, which rely on complex arbitrage strategies between spot and futures markets, are expected to undergo particularly intense scrutiny. These products introduce additional layers of risk and operational complexity that regulators are likely to examine thoroughly before granting approval.
The push for these innovative financial instruments reflects a broader trend of institutional interest in diversified crypto exposure, even as regulators maintain a cautious stance. Market participants will be closely monitoring the SEC’s response, which could set important precedents for future crypto-based investment vehicles.
