Altcoin ETF approval accelerates: The breakthrough moment for HBAR and DOGE has arrived

New Regulatory Developments: How the SEC Evaluates Cryptocurrency Funds

The U.S. Securities and Exchange Commission (SEC) is gradually refining its regulatory framework for cryptocurrency exchange-traded funds (ETFs). Recently, several altcoin ETF proposals have been delayed for review, including the highly anticipated HBAR and DOGE projects. The SEC’s cautious approach is not a negative signal but a necessary step to ensure healthy market development.

This approval process typically includes submitting regulatory forms (S-1 and 19b-4), opening public comment periods, and conducting in-depth assessments of market manipulation risks, liquidity conditions, and investor protection. During bear markets, characterized by sustained asset price declines and diminished market confidence, the SEC’s emphasis on risk control becomes even more prominent.

Three Core Focus Areas of Review

When evaluating altcoin ETFs, the SEC primarily focuses on the following aspects:

Risk Management: Assessing whether the underlying assets are susceptible to manipulation to prevent ETF investors from becoming victims of market volatility.

Market Depth Evaluation: Examining whether the trading liquidity of the altcoins is sufficient to support large-scale institutional inflows and outflows, avoiding price distortion due to insufficient liquidity.

Investor Protection Mechanisms: Ensuring that both retail and institutional investors are adequately protected, especially during prolonged downturns as described in the bear market definition.

The Decisive Role of Public Opinion

Stakeholder feedback is indispensable in the SEC’s decision-making process. Industry practitioners, investor organizations, technical experts, and advocacy groups all have opportunities to express their views on proposed ETFs. These opinions help the SEC understand:

• The actual demand for altcoin investment products
• The level of institutional support
• Common risk concerns within the industry and among the public

For high-profile projects like HBAR and DOGE, public sentiment often directly influences regulatory tilt.

HBAR: Advantages of Non-Security Status

HBAR has a unique competitive edge in ETF applications. The key is that the SEC has classified it as a non-security asset, meaning it does not need to undergo the more stringent review process applicable to security-type ETFs. Analysts point out that this classification positions HBAR favorably within the current regulated crypto investment product market.

First-Mover Advantage in Europe

Although HBAR’s ETF progress in the U.S. remains underway, it has achieved substantial breakthroughs in Europe. HBAR exchange-traded products (ETPs) are now listed on major exchanges such as Börse Frankfurt and Euronext Amsterdam. These listings demonstrate genuine institutional interest and also serve as reference cases for the U.S. market.

DOGE: Fast-Track and Challenges Coexist

Bitwise’s DOGE ETF application has adopted a different regulatory pathway—under the Rule 8(a) Automatic Approval. This rule allows ETFs to be listed within 20 days unless the SEC intervenes. While this route accelerates the listing process, it also entails stricter scrutiny of market manipulation and liquidity.

Price Volatility and Market Sentiment

DOGE’s price exhibits significant fluctuations, mainly driven by whale wallet movements and ETF-related expectations. Despite mixed technical signals, growing institutional interest indicates that DOGE’s potential as a mainstream investment tool is becoming more apparent.

The Changing Role of Institutional Capital

Accelerated Adoption

Altcoin ETFs are attracting increasing attention from institutional investors. Industry forecasts suggest that by 2025, the probability of approval for multiple altcoin ETFs, including HBAR and DOGE, could reach as high as 90%. This reflects a deeper transformation—regulated crypto investment products are becoming the standard entry point for traditional investors into the crypto market.

Ongoing Challenges: Risks and Stability

Despite optimistic prospects, market manipulation risks and liquidity shortages remain major hurdles for altcoin ETFs. These risks are especially pronounced for assets like DOGE and HBAR with smaller market sizes. During periods of sustained price declines as defined in bear markets, liquidity shortages can amplify risks further. Addressing these issues is essential for obtaining regulatory approval.

Altcoin ETFs vs. Leading Projects: Benchmark Analysis

Bitcoin and Ethereum ETFs have set successful precedents, but projects like HBAR and DOGE face entirely different challenges.

Comparative Differences

Liquidity Depth: Bitcoin and Ethereum possess far deeper liquidity pools, ensuring that large transactions do not impact prices significantly.

Market Maturity: Altcoins are generally in early development stages, with more complex participant structures, leading to higher volatility compared to Bitcoin and Ethereum.

Regulatory Scrutiny Intensity: Due to their smaller market caps, altcoins are subject to higher levels of regulatory assessment.

Outlook for 2025: Approval Wave Possibilities

Industry experts are optimistic about the prospects for altcoin ETFs. Many analysts predict a wave of approvals around 2025, driven by factors such as:

• Institutional Investors’ Active Exploration: Traditional financial institutions are increasing their investments in altcoin ETFs
• Regulatory Framework Optimization: After multiple cases, the SEC is gradually refining its evaluation standards
• Mainstream Adoption of Crypto Assets: Altcoins are increasingly recognized as legitimate investment categories

However, the timing of approvals ultimately depends on the industry’s ability to effectively address core issues like market manipulation prevention and liquidity assurance.

Conclusion

HBAR and DOGE represent a turning point for the cryptocurrency market on the path to ETF approval. While regulatory uncertainties remain, growing institutional interest and the unique advantages of these projects make them strong contenders in the crypto ETF space. As the SEC continues its review process and gathers market feedback, the future outlook for altcoin ETFs will become clearer, offering investors more regulated investment options.