Crypto investment products structured as Exchange-Traded Products (ETPs) are expected to face a wave of liquidations in the coming years. This outlook is driven by a surge in new product launches that is not matched by sufficiently strong investor demand.

In a post on X on Wednesday (17/12/2025), Bloomberg ETF analyst James Seyffart noted that the anticipated spike in crypto ETP launches in 2026 could be followed by widespread closures toward the end of 2026 and into 2027. His view aligns with projections from crypto asset manager Bitwise, which estimates that more than 100 crypto ETFs could enter the market in 2026.

“We’re likely to see a significant number of crypto ETPs shut down. This could begin as early as late 2026, but is more likely to materialize in 2027,” Seyffart said.

He added that more than 126 crypto ETP filings are currently awaiting decisions from the US Securities and Exchange Commission (SEC). According to Seyffart, many issuers are taking an overly aggressive approach by launching multiple new products without carefully assessing actual market demand.

Such a strategy risks creating an overcrowded marketplace, where only a small number of products are able to attract meaningful capital inflows and survive over the medium to long term.

Closure Risk Due to Limited Assets Under Management

ETF closures are not uncommon in the global financial industry. In 2024 alone, 622 ETFs were shut down worldwide, including more than 189 in the United States. Meanwhile, Morningstar data shows that the 244 ETFs closed in the US in 2023 had an average lifespan of 5.4 years.

Most of these products were discontinued because they failed to attract sufficient investor inflows. As a result, assets under management remained too small to justify continued operation from a cost-efficiency perspective.

A similar pattern is emerging in the crypto sector. Several crypto ETPs were liquidated throughout 2025, with prominent examples including the ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY) and the ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC).

Looking ahead, the expected increase in crypto ETP launches may be further accelerated by the SEC’s implementation of generic listing standards. These rules allow ETP applications to be reviewed collectively rather than individually, opening the door to mass approvals starting in 2026.

Even before the regulations officially took effect in September, several asset managers had already filed for more speculative token-based ETFs, including meme coins linked to public figures.

That said, not all crypto ETPs are underperforming. Some products have generated relatively strong market interest. ETFs tracking Litecoin, Solana, and XRP attracted notable investor demand in 2025, building on the momentum established by spot Bitcoin and Ethereum ETFs launched in 2024.

According to Farside Investors, US spot Bitcoin ETFs have recorded cumulative inflows of US$57.6 billion, or approximately Rp950 trillion, since their launch in January 2024. Meanwhile, spot Ethereum ETFs have attracted total inflows of US$12.6 billion, or about Rp208 trillion, since July 2024.

Spot Solana ETFs managed by Bitwise, VanEck, Fidelity, 21Shares, Franklin Templeton, and Grayscale have also drawn around US$725 million, equivalent to roughly Rp12 trillion, since late October.