Is the Crypto ETF bubble about to burst? Analyst: Hundreds of funds launching in 2026, and a potential delisting wave in 2027

The cryptocurrency market is迎來 an unprecedented wave of ETF launches, but behind this feast, there may be significant bubble risks. Although the market generally expects over 100 cryptocurrency ETFs to debut by 2026, Bloomberg senior ETF analyst warns that many of these products may face “lack of interest,” ultimately leading to rapid delistings and liquidations.

The Cost of Shooting in the Dark: More Issuances, Faster Deaths

Bloomberg senior ETF analyst James Seyffart pointed out on Wednesday that while he agrees with digital asset management firm Bitwise’s forecast — that over a hundred cryptocurrency ETFs will launch by 2026 — he also poured cold water on the idea, saying “many products simply won’t last long.”

We will see a large number of crypto ETPs being liquidated. This wave of delistings might appear by the end of 2026, but it’s more likely to fully explode before the end of 2027.

He noted that currently, over 126 ETF applications are pending review at the U.S. Securities and Exchange Commission (SEC).

James Seyffart described the current mindset of issuers as “shooting in the dark,” “throwing all products at the wall first — see which ones stick (survive).”

Historical Lessons: Insufficient Capital Inflows Are Deadly

This is not alarmist. Looking back at traditional financial markets, ETF competition has always been fiercely brutal. According to financial media outlet The Daily Upside, last year saw 622 ETFs declared delisted and liquidated, with 189 of those in the U.S. alone. Morningstar data further shows that the 244 U.S. ETFs that shut down in 2023 had an average lifespan of only 5.4 years.

I’m in 100% agreement with @BitwiseInvest here. I also think we’re going to see a lot of liquidations in crypto ETP products. Might happen at tail end of 2026 but likely by the end of 2027. Issuers are throwing A LOT of product at the wall — there’s at least 126 filings pic.twitter.com/UELUKUng7Y

— James Seyffart (@JSeyff) December 17, 2025

The reasons for these investment products going out of business are uniform: “nobody is buying.” When capital inflows are insufficient and assets under management (AUM) are too low, issuers struggle to cover operational costs, ultimately having no choice but to exit.

In fact, this cold wind has already blown into the crypto space. This year, several crypto ETPs have quietly exited, most notably two products launched by Ark Invest, led by “Queen of Stocks” Cathie Wood, in collaboration with 21Shares: the “ARK 21Shares Active Bitcoin & Ethereum Strategy ETF (ARKY)” and the “ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC).”

SEC Loosens Review Standards: A Wave of “Crypto ETF Listings” Expected in 2026

Why do market expectations foresee a wave of crypto ETF approvals in 2026? The main reason is the SEC’s attitude shift.

Industry analysts point out that with the SEC implementing new “Generic Listing Standards,” regulators no longer need to conduct time-consuming “case-by-case reviews” for each application. This will significantly accelerate the product listing process and is expected to trigger a new wave of ETP issuance.

Before the new rules take effect in September this year, asset management companies are eager to try, even submitting highly speculative ETF applications linked to meme coins associated with First Lady Melania Trump, testing regulatory boundaries.

Market Overview: Bitcoin Still the King of Attracting Capital

Despite the many variables ahead, the current dominance remains evident. Besides Bitcoin and Ethereum ETFs establishing a foothold in 2024, ETFs tracking Litecoin (LTC), Solana (SOL), and Ripple (XRP) have also been launched this year, achieving good results.

According to data from Farside Investors:

• Bitcoin spot ETF: since its launch in January 2024, has attracted a total of $57.6 billion;
• Ethereum spot ETF: since its launch in July 2024, has attracted $12.6 billion;
• Solana spot ETF: since late October this year, products launched by giants like Bitwise, VanEck, Fidelity, and Grayscale have attracted $72.5 million in capital.

The crypto ETF market is in a period of feverish expansion, but when the tide recedes, who is swimming naked may be revealed by 2027.

_

Disclaimer: This article is for market information only. All content and viewpoints are for reference only and do not constitute investment advice. They do not represent the objective views and positions of Block. Investors should make their own decisions and transactions. The author and Block will not be responsible for any direct or indirect losses resulting from investor transactions. _