Under the new standard, Shanzhai ETFs are being launched in bulk: Completing a Decade's Worth of Bitcoin's Journey in Just Six Months

Original Title: "Rise of ETF Clones, Completing Bitcoin's Ten-Year Journey in Six Months: The Crypto Market Is Undergoing a Structural Transformation"

Original Author: Clow, Blockchain Basics

A Bitcoin ETF took nearly ten years to be approved, while Shitcoins only took six months.

In November 2025, an unbelievable event took place on Wall Street. Solana, XRP, Dogecoin—these so-called "meme coins" that were once considered speculative toys by mainstream finance, suddenly, within a few weeks, landed on the New York Stock Exchange and Nasdaq, transforming into regulated ETF products.

Even more magical, these ETFs did not go through individual SEC approval but rather leveraged a new set of "General Listing Standards" and a little-known "8(a) Clause" fast track, almost automatically coming into effect with the tacit approval of regulatory bodies.

The rules of the game are being completely rewritten.

Regulatory "Strategic Surrender"

For a long time, the SEC's attitude toward cryptocurrency ETFs can be summarized in four words: Delay as Long as Possible.

Every new crypto ETF application required exchanges to submit rule change applications, with the SEC having a review period of up to 240 days, often citing "market manipulation risk" at the last minute as a reason for rejection. This "regulatory enforcement" approach led to countless applications languishing.

But on September 17, 2025, everything suddenly changed.

The SEC approved a "General Listing Standards" amendment proposed by three major exchanges, which, though appearing technical, actually opened a wide door for Shitcoin ETFs: Certain crypto assets meeting specific conditions could be listed directly without individual approval.

The core admission conditions are straightforward:

· Either, the asset has at least 6 months of trading history on a CFTC-regulated futures market, and the exchange has a surveillance agreement with that market;

· Alternatively, there is already a precedent in the market for an ETF holding at least a 40% exposure to that asset.

As long as one of these conditions is met, the Shanzhai ETF can take the "fast track." Solana, XRP, and Dogecoin all happen to meet the criteria.

More aggressively, issuers have also found another "accelerator"—the 8(a) provision.

Traditional ETF applications usually include a "delay amendment" provision, allowing the SEC to conduct an indefinite review. However, in the fourth quarter of 2025, issuers such as Bitwise and Franklin Templeton began removing this provision from their applications.

Under Section 8(a) of the 1933 Securities Act, if the registration statement does not include language for delayed effectiveness, the document will automatically become effective 20 days after submission unless the SEC initiates a stop order.

This is like giving the SEC a multiple-choice question: either find sufficient reasons to stop within 20 days, or watch the product automatically go live.

Due to government shutdown-related staffing shortages, combined with the pressures of judicial rulings like the Ripple case and Grayscale case, the SEC is almost powerless to handle the backlog of hundreds of applications. More importantly, on January 20, 2025, SEC Chairman Gary Gensler resigned, leaving the entire regulatory body in a state of "lame duck."

Issuers seized this once-in-a-lifetime window of opportunity and went into a frenzy.

Solana ETF: A Bold Attempt at Staking Rewards

With its technological allure as a high-performance public blockchain, Solana has become the third "blue-chip" asset to be ETF-ized after BTC and ETH.

As of November 2025, there are 6 Solana ETFs listed, including Bitwise's BSOL, Grayscale's GSOL, VanEck's VSOL, and others. Among them, Bitwise's BSOL is the most aggressive—it not only provides exposure to SOL's price but also attempts to distribute on-chain rewards to investors through a staking mechanism.

This is a bold attempt. The SEC has long considered staking services as securities issuance, but Bitwise explicitly labels it as a "Staking ETF" in the S-1 filing, attempting to design a compliant structure to distribute staking rewards. If successful, this would allow the Solana ETF to not only capture price appreciation but also provide a "dividend"-like cash flow, making it far more attractive than a non-yielding Bitcoin ETF.

Another point of contention is that Solana does not have futures contracts on CME. According to the SEC's historical logic, this should have been a reason for rejection. However, the regulators ultimately approved, potentially signaling their acknowledgment that the long trading history on regulated platforms like Coinbase is sufficient to establish effective price discovery.

The market performance is equally impressive.

According to SoSoValue data, Solana ETF has seen net inflows for 20 consecutive days since its launch, totaling $568 million. While Bitcoin and Ethereum ETFs faced significant outflows in November, the Solana ETF attracted funds against the trend. By the end of November, the total assets under management of six Solana funds had reached $843 million, accounting for approximately 1.09% of SOL's market cap.

This indicates that institutional funds are undergoing asset rotation, moving out of crowded Bitcoin trades to seek emerging assets with higher beta and growth potential.

XRP ETF: Regulatory Reassessment Post Settlement

XRP's journey to an ETF has long been hindered by the legal dispute between Ripple Labs and the SEC. After reaching a settlement in August 2025, the Sword of Damocles hanging over XRP's head finally fell, leading to a surge in ETF applications.

As of November, there are already 5 XRP ETFs listed or set to be listed:

Bitwise's XRP ETF was listed on November 20 and directly uses "XRP" as the trading symbol, a bold marketing strategy that sparked controversy—some view it as a stroke of genius to directly target retail investors in searches, while others criticize it for potentially confusing the underlying asset with the derivative fund.

Canary's XRPC debuted on November 13 with a record-breaking $243 million inflow on the first day.

Grayscale's GXRP was listed on November 24, converted from a trust, addressing the premium-discount issue.

Despite strong initial capital inflows, the XRP price faced short-term pressure after the ETF listings. In the days following Bitwise's ETF listing, XRP's price dropped by around 7.6%, temporarily declining by over 18%.

This is typical "buy the rumor, sell the news" behavior. Speculative funds bought in advance as the ETF approval expectation formed, and then took profits once the news was confirmed. Macro factors, such as strong employment data leading to reduced rate cut expectations, also suppressed overall risk asset performance.

However, in the long run, the ETF introduced continuous passive buying pressure for XRP. Data shows that XRP ETF has seen cumulative net inflows of over $587 million since its launch. Speculators are stepping back, but asset allocators are stepping in, building a stronger long-term base for the XRP price.

Dogecoin ETF: From Meme to Asset Class

The ETFization of Dogecoin marks a significant turning point: Wall Street is starting to embrace the "Meme coin" as a legitimate investment asset based on community consensus and network effects.

Currently, there are three Dogecoin-related products:

Grayscale's GDOG listed on November 24;

Bitwise's BWOW has submitted the 8(a) application, awaiting automatic effectiveness;

21Shares' TXXD is a 2x leveraged product targeting high-risk appetite investors.

Market response has been relatively muted. GDOG had a trading volume of only $1.41 million on the first day, with no net inflows. This could be due to the highly retail nature of the Dogecoin investor base—they prefer to hold tokens directly on exchanges rather than pay management fees through ETFs. However, the market generally expects Bitwise's BWOW to activate institutional demand in this sector with lower fees and stronger marketing.

Next Wave: Litecoin, HBAR, and BNB

In addition to the three major meme coins, Litecoin, Hedera (HBAR), and BNB are also actively seeking ETFization.

Litecoin, as a Bitcoin code fork, is the closest to BTC in regulatory attributes and is considered a commodity. Canary Capital submitted an application in October 2024 and filed an 8-A form (the final step in exchange registration) on October 27, 2025, indicating that an LTC ETF listing is imminent.

The HBAR ETF application is led by Canary, followed by Grayscale. The key breakthrough came when Coinbase Derivatives launched CFTC-regulated HBAR futures contracts in February 2025, providing the necessary regulatory market foundation for HBAR to meet the "universal listing standard." Nasdaq has filed a 19b-4 document for Grayscale, indicating that HBAR is highly likely to be the next approved asset.

BNB is the most challenging attempt. VanEck has submitted an S-1 application for VBNB, but given the close relationship between BNB and the Binance trading platform, as well as Binance's past complex issues with U.S. regulators, the BNB ETF is considered the ultimate test of the SEC's new leadership's regulatory standards.

The "Crypto Multiplier" Effect: The Double-Edged Sword of Liquidity

The listing of altcoin ETFs is not just about adding investment vehicles but also about reshaping the entire market through structural fund flows.

A study by the Bank for International Settlements (BIS) introduced the concept of "Crypto Multiplier": the market capitalization response of crypto assets to inflows is non-linear. For altcoins with much lower liquidity compared to Bitcoin, institutional funds brought in by ETFs could create significant price impacts.

According to Kaiko data, Bitcoin's 1% market depth is currently around $5.35 billion, while most altcoins have market depths only a fraction of that. This means that an equivalent inflow of funds (such as the $105 million on the first day of the Bitwise XRP ETF) should theoretically have a much larger price-driving effect on XRP compared to BTC.

The current "sell the news" phenomenon masks this effect. Market makers need to buy spot assets at the beginning of ETF subscriptions, but if overall market sentiment is bearish, they may use futures markets for short hedges or off-exchange markets to absorb inventory, temporarily suppressing the uptrend in spot prices.

However, as ETF assets under management grow, this passive buying pressure will gradually deplete exchange liquidity, leading to more volatile and upward-biased price swings in the future.

Market Stratification: A New Valuation System

The ETF rollout has intensified the liquidity stratification in the crypto market:

First Tier (ETF Assets): BTC, ETH, SOL, XRP, DOGE. These assets have a compliant fiat onramp, registered investment advisor (RIA) approval, and pension fund accessibility. They will benefit from a "compliance premium" and lower liquidity risk.

Second Tier (Non-ETF Assets): Other Layer 1 and DeFi tokens. Due to the lack of an ETF channel, these assets will continue to rely on retail funding and on-chain liquidity, potentially experiencing reduced correlation with mainstream assets and facing the risk of marginalization.

This differentiation will reshape the valuation logic of the entire crypto market, shifting from speculation-driven to compliance channel-based and institutionally allocated diversified valuation.

Summary

The altcoin ETF wave by the end of 2025 marks a decisive step for crypto assets from "peripheral speculation" to "mainstream allocation."

Through clever utilization of the "General Listing Standards" and "8(a) Clause," issuers successfully breached the SEC's defense line, bringing once controversial assets like Solana, XRP, and Dogecoin into regulated trading platforms.

This not only provided compliant fiat onramps for these assets but more importantly, at a legal level, effectively confirmed the "non-security" nature of these assets.

Despite facing short-term profit-taking pressure, as institutional investors begin to allocate 1%-5% positions to these assets in their models, structural fund inflows will inevitably drive up the valuation of these "digital commodities."

In the next 6-12 months, we will see more assets (such as Avalanche, Chainlink) attempting to replicate this path.

In a diversified crypto market, ETFs will become the most crucial watershed in distinguishing "core assets" from "peripheral assets."

For investors, this transformation brings not only investment opportunities but also a complete restructuring of the market landscape: a market once driven by speculation and narratives is evolving into a new order anchored in compliance channels and institutional allocation.

This process is irreversible.