SEC Rule Changes Ignite Optimism for XRP, Dogecoin Spot ETF Approvals

The U.S. Securities and Exchange Commission (SEC) has introduced updated listing guidelines for digital asset exchange-traded funds (ETFs), fueling widespread anticipation for the imminent approval of Spot ETFs for altcoins such as XRP and Dogecoin (DOGE). These adjustments significantly simplify the approval process, allowing certain cryptocurrency-focused ETFs to bypass time-consuming individual reviews if predefined criteria are met. While the changes present a promising pathway for innovation and expanded institutional adoption, some analysts remain cautious due to market-specific hurdles such as liquidity issues and limited market capitalization.

SEC’s New Framework Simplifies ETF Approval

As of October 18, the SEC ratified regulatory amendments proposed by leading stock exchanges, including Nasdaq and NYSE Arca. The new framework redefines approval processes for digital asset ETFs, enabling expedited clearance for Spot ETFs as long as certain conditions are fulfilled. Specifically, qualifying ETFs must:

• Operate within the Intermarket Surveillance Group (ISG) to ensure compliance and transparency.
• Provide six months of trading data for linked futures contracts.
• Allocate at least 40% of ETF assets to existing funds within the crypto ecosystem.

These regulatory changes are expected to reduce roadblocks to ETF listings while maintaining oversight. SEC Chair Paul Atkins expressed confidence in the revisions, stating, "This measure ensures that the U.S. capital markets remain at the forefront of digital asset innovation. It expands investor options and promotes innovation."

Implications for XRP, Dogecoin, and Other Altcoins

Industry experts believe the updated guidelines herald a new era for major altcoins, with XRP, Dogecoin, Solana (SOL), and others standing to benefit. XRP’s inclusion in a Spot ETF could help overcome its lingering reputation challenges stemming from prolonged litigation with the SEC. A Spot ETF tied to XRP may improve liquidity, boost trust among institutional investors, and unlock simplified trading opportunities.

Dogecoin’s potential, however, appears less promising despite the optimism surrounding these guidelines. On-chain analytics from Nansen indicate a drop of over 4% in the holdings of large-scale Dogecoin whales as of October 18, hinting at ongoing divestment by major investors. This trend underscores the meme coin’s struggle to generate significant institutional momentum.

Market Viability Concerns for Low-Cap Altcoins

Despite enthusiasm, skepticism persists regarding market readiness for ETFs tied to low-cap altcoins. XRP, although bolstered by wider institutional interest, carries a market capitalization of approximately $184.9 billion as of October 18. Comparatively, Dogecoin’s valuation stands at $42.2 billion, starkly dwarfed by Ethereum (ETH) and its substantial $552.4 billion market cap. These figures highlight the uphill battle for altcoin ETFs lacking robust adoption and liquidity.

Jung Seok-moon, head of Presto Research Center, advocates viewing these ETF approvals as broader progress rather than focusing exclusively on the impact for individual altcoins. “Rather than concentrating on the market influence of specific assets, the approval of these ETFs should be considered symbolic progress toward mainstream crypto adoption,” he advised. Jung added that altcoins like Dogecoin, whose market cap limits their institutional appeal, may fail to achieve transformative growth purely through ETF listings.

Potential Growth Opportunities

Despite tempered expectations, history suggests that ETF approval could serve as a catalyst for growth among previously undervalued assets. Jung pointed to Ethereum’s early struggles to generate significant institutional enthusiasm prior to its own ETF approval. Yet its listing eventually sparked considerable buying activity, fueling rapid value appreciation.

“Ethereum initially faced muted expectations for its ETF, but institutional interest quickly surged after regulatory acceptance. XRP and Dogecoin may similarly encounter growth opportunities once their Spot ETFs receive SEC approval,” Jung explained.

Conclusion

The SEC’s modifications to ETF listing requirements mark a watershed moment for cryptocurrency markets, simplifying regulatory pathways and fostering institutional accessibility to digital assets. While XRP and Dogecoin are expected to generate interest, concerns around liquidity and market capitalization suggest that their growth trajectories may vary. However, the symbolic importance of Spot ETF approvals cannot be understated, paving the way for the mainstream legitimization of altcoins as investable assets.

As optimism builds for the crypto ETF space, informed investors will need to monitor both short-term price movement and longer-term sector innovation to gauge the lasting impacts of regulatory advances.