Regulatory uncertainty clouds future of new crypto ETFs

Analysts at Binance note that regulatory uncertainty is clouding the future of new crypto ETFs, raising concerns about their potential approvals and market impact.

As regulatory uncertainties loom over new crypto exchange-traded funds tied to assets such as Solana (SOL) and XRP (XRP), analysts at Binance are highlighting the need for fundamental growth in the broader ecosystem to attract institutional investment and deliver “long-term growth.” ”

Millennials exhibit the strongest demand for crypto ETFs, while Boomer investors show relatively lower interest | Source: Binance

In a research report seen by Crypto.news on Friday, analysts expressed concern about the newly introduced ETFs, noting that these tokens have a limited derivatives market size, minimal institutional participation and ongoing regulatory scrutiny. They suggested that the approval process for these new asset ETFs “will likely be both lengthy and complex.”

“The market may also wait for the broader success and peer acceptance of Ethereum ETFs before considering more digital asset ETFs.”

Binance

Still, analysts noted that the upcoming election season could impact regulatory perspectives and potentially change the course of these products. According to the report, historically crypto markets have reacted sharply to new developments and narratives, but long-term growth will depend on sectors such as decentralized finance, tokenization and stablecoins adapting to the product market.

Institutions should look beyond Bitcoin

Binance says that although spot ETFs make it easier for many investors to enter, they represent “only a piece of the broader market.” For sustainable growth in the crypto sector, analysts argue that capital must flow into various areas “beyond Bitcoin,” adding that attracting significant institutional investment will likely require the market to “shift toward fundamentals-focused growth.”

Analysts at Binance concluded that the expansion of blockchain native products will not only drive on-chain adoption but also attract more investment into Bitcoin (BTC), Ethereum (ETH), and the broader crypto ecosystem.