Despite the paralysis of much of the U.S. government due to the October shutdown, a series of new spot cryptocurrency ETFs successfully launched, signaling a pivotal moment for digital asset investment and regulatory evolution.
On October 27, the New York Stock Exchange (NYSE) expanded the landscape of crypto-based investment products by listing four new spot ETFs tied to Solana (SOL), Litecoin (LTC), and Hedera (HBAR). These additions marked the first time that major crypto ETFs beyond Bitcoin (BTC) and Ethereum (ETH) were made available to public investors on U.S. exchanges.
This development unfolded in the midst of a federal government shutdown that commenced on October 1, when Congress failed to pass a funding bill. The resulting budget crisis forced the Securities and Exchange Commission (SEC) — the key regulator for ETFs — to furlough over 90% of its staff, leaving only a skeletal team in place for emergency operations.
Under normal circumstances, ETF approvals require active SEC participation, particularly in reviewing and approving S-1 registration filings. However, the successful launch of these new ETFs was made possible due to a significant regulatory shift introduced weeks before the shutdown.
In mid-September 2025, the SEC adopted a procedural reform known as the “generic listing standards” for commodity-based exchange-traded products. This reform, published in the Federal Register and effective immediately upon approval, allowed exchanges to list certain ETFs without having to go through the lengthy and often unpredictable Section 19(b) approval process under the Securities Exchange Act of 1934. Historically, that process could stall new listings for up to eight months.
Thanks to the new rule, exchanges like NYSE, Nasdaq, and Cboe gained the authority to list spot crypto ETFs directly — as long as the underlying assets met specific criteria. These include either a regulated futures market or a surveillance-sharing agreement with another exchange, which ensures transparency and investor protection.
This rule change built on precedents set earlier in the year. The SEC approved the first spot Bitcoin ETFs in January 2024 after being directed by court rulings to treat spot products consistently with previously approved Bitcoin futures ETFs. Ethereum spot ETFs followed in May, further reinforcing the SEC’s evolving stance on digital asset products.
With this regulatory foundation in place, asset managers moved swiftly. Bitwise, Canary Funds, and Grayscale each submitted pre-shutdown filings for their respective ETFs. These included both the S-1 registration statement, which governs the public offering of shares under the Securities Act of 1933, and the Form 8-A, which formally registers the securities for exchange trading under the Securities Exchange Act of 1934.
Crucially, under federal securities law, an S-1 filing becomes automatically effective 20 days after its submission unless the issuer requests a delay or the SEC intervenes. This legal mechanism ensured that, even during a government shutdown, the filings could mature into effective registrations without active SEC oversight — provided no issues were identified beforehand.
On Monday morning, just days before trading began, the NYSE certified the necessary 8-A filings, clearing the final procedural hurdle. As a result, Bitwise’s Solana ETF debuted on schedule, followed by Canary Funds’ Litecoin and Hedera products on Nasdaq. Grayscale’s Solana ETF — converted from its existing Solana Trust — was set to list the following day.
Market reaction was swift, albeit moderate. Solana’s price climbed roughly 4% following the announcement, while Litecoin and Hedera also experienced modest gains. Though trading volumes for these ETFs are expected to be relatively low in the early stages, analysts anticipate growth as institutional brokers begin coverage and investor interest expands.
The launch of these ETFs despite the shutdown highlights not only the resilience of the regulatory framework but also the growing maturity of the crypto market. It underscores the increasing integration of digital assets into mainstream financial systems, as well as the importance of procedural foresight by asset managers.
Beyond the initial wave of ETFs, a long queue of similar products awaits approval. The success of Solana, Litecoin, and Hedera ETFs opens the door for additional altcoins to enter the ETF arena — provided they can demonstrate sufficient market depth, regulatory compliance, and risk mitigation.
This shift could have significant implications for the broader crypto ecosystem. For one, it may encourage greater institutional participation in assets beyond Bitcoin and Ethereum, diversifying investment across the crypto landscape. It also raises the bar for transparency and oversight in altcoin markets, which have historically lacked the regulatory scrutiny applied to their larger counterparts.
Moreover, the introduction of these ETFs offers retail investors simplified and regulated pathways to gain exposure to alternative digital assets without the technical complexities of wallets, private keys, or direct trading on crypto exchanges. This could broaden crypto adoption among traditional investors who have so far remained on the sidelines.
The success of these launches also sends a message to lawmakers and regulators: the crypto market is evolving rapidly, and policy frameworks must adapt accordingly. Future legislative discussions may focus on formalizing ETF rules for a wider array of digital assets, or even on establishing a dedicated regulatory body for digital finance.
Looking ahead, the industry is watching closely to see how these ETFs perform in the market and whether they pave the way for similar products tied to other emerging tokens, such as Avalanche (AVAX), Polkadot (DOT), or Chainlink (LINK). Each of these assets brings unique value propositions and ecosystems that could appeal to investors seeking diversification within the crypto asset class.
In conclusion, the launch of Solana, Litecoin, and Hedera spot ETFs during a government shutdown was not a regulatory anomaly but rather a testament to strategic planning, legal foresight, and a changing regulatory landscape. As the ETF universe grows to embrace a broader spectrum of digital assets, both investors and regulators must navigate new opportunities and challenges in this rapidly transforming financial frontier.