72 Crypto ETF Filings Are Stacked on the SEC's Desk, Signaling a Rise in Investor Appetite. XRP and Solana Dominate the Pile

New SEC Chair Paul Atkins, who has $6 million in crypto-related investments, faces a high-stakes decision. XRP and Solana Steal the Lead in ETF Filings.

The U.S. Securities and Exchange Commission (SEC) has a backlog of 72 exchange-traded fund (ETF) filings, with applications for XRP and Solana ETFs forming the bulk of the submissions, according to a Bloomberg report on Friday.

The report by Eric Balchunas, a Bloomberg ETF analyst, noted that out of the 72 ETF filings awaiting the SEC's review, 18 are for XRP ETFs and 17 are for Solana ETFs. Together, these filings constitute nearly half of the total number of ETF applications pending with the regulator.

The large number of XRP ETF filings follows the crypto asset's legal win against the SEC earlier this year, which cleared the path for ETF issuers to apply for such products. On the other hand, Solana's appeal lies in its lightning-fast blockchain, which can process thousands of transactions per second, dwarfing Bitcoin and Ethereum, which have dominated past waves of ETF launches.

The filings also include applications for meme coin ETFs, with products like DOGE, PENGU, TRUMP, MELANIA, and BONK ETFs all pending approval by the SEC. Some of the filings include proposals for 2X leveraged funds, which would double the potential reward and risk for investors.

Leveraged ETFs are designed to amplify the daily return or loss of an underlying index or security, thereby increasing both the potential gains and losses for investors. In the case of meme coins, which are already known for their high volatility, leveraged ETFs could turbocharge this instability.

For instance, DOGE's price soared by 300% in 2021, only to decline by 80% the following year, according to data from CoinGecko.

Meanwhile, Paul Atkins, who took over as the SEC chair this year, has disclosed hefty crypto investments in his latest financial filing. According to a report by The Block, Atkins's investments in crypto-related assets total around $6 million.

This substantial stake in the cryptocurrency market is sure to raise eyebrows among market watchers, especially given Atkins's role as the head of the SEC, the agency that regulates the securities industry and has the final say on whether to approve new ETFs.

Atkins's investments signal a personal tie to the crypto market, which could shape his view on the 72 ETF filings that are currently pending with the SEC. However, it's worth noting that no specifics on Atkins's assets are public, leaving analysts to parse the implications of his investments.

The SEC's mandate is to protect investors, and its decision on the ETF filings could have far-reaching consequences for the future of crypto in the U.S.

If the SEC approves the ETFs, it could open the door for billions of dollars in institutional money to pour into the crypto market. For example, BlackRock's Bitcoin ETF, which was approved earlier this year after years of rejections, pulled in $10 billion in its first six months.

However, the approval of meme coin ETFs could pose a dilemma for the SEC, as it would legitimize speculative assets and could lure retail investors into making risky investments.

Some critics, like former SEC official John Reed Stark, have warned of "market chaos" if the SEC approves leveraged meme coin ETFs.

"Can you imagine the market chaos if the SEC approves / registers any of the (unbelievable) pending leveraged meme coin ETFs (e.g., 2X leveraged TRUMP, HEGEMONY, BONK, or Pengu ETFs) that some ETF issuers have filed with the SEC?" Stark wrote on X, formerly Twitter.

The SEC has faced pressure from institutional investors to approve a Bitcoin ETF for over a decade, and it wasn't until 2024 that the regulator finally gave the green light to such products.

This shift in stance suggests a thaw in the regulatory frost, but even as the SEC chairman faces a high-stakes decision on the 72 ETF filings, the regulator's approval of meme coin ETFs would test the limits of this change in attitude.

This article was originally published on Benzinga and has been edited and republished with permission.