US government reopening may unleash crypto ETF floodgates

Analysts predict that the resumption of operations by the US government might lead to a surge in crypto exchange-traded fund (ETF) approvals in 2026. Matt Hougan, chief investment officer at Bitwise, noted the significant demand for crypto ETFs, stating that the year is likely to witness over 100 new launches, including a variety of single-asset crypto ETPs. This surge is expected to rekindle investor interest in digital assets, particularly from those seeking passive exposure to this asset class. Despite the overall positive sentiment, there have been reports of heavy capital outflows from existing crypto ETFs, affecting cryptocurrency prices negatively. The newly launched Canary Capital’s XRP ETF saw substantial trading volume yet faced price declines. Bitcoin ETFs are also experiencing significant outflows, showing a challenging market environment. The market's existing pressures highlight the complexities of ETF dynamics in crypto, where demand is met with ongoing volatility.

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