Crypto ETF Approvals Expected to Surge in 2026 as Government Returns to Normal Operations

TLDR

• Bitwise CIO predicts over 100 crypto ETF launches in 2026 following the end of the US government shutdown
• Canary Capital’s XRP ETF recorded $58 million in first-day trading volume, making it the most successful ETF launch in 2025
• Bitcoin ETFs experienced $1.1 billion in outflows during November, tracking toward their worst month on record
• Analysts say Bitcoin’s recent price decline stems from high futures leverage rather than government shutdown or AI bubble concerns
• The average cost basis for Bitcoin ETFs sits at $89,600, putting many investors in negative territory

The return of normal US government operations may lead to a wave of new cryptocurrency ETF approvals in 2026. Matt Hougan, chief investment officer at Bitwise, told CNBC that demand for crypto ETFs and exchange-traded products remains strong.

Hougan predicts more than 100 crypto ETF launches in the coming year. He expects to see many single-asset crypto ETPs along with index-based products. Index ETFs will likely attract investors seeking small, passive crypto allocations.

Despite predictions of increased approvals, existing crypto ETFs are facing challenges. Bitcoin ETFs recorded approximately $1.1 billion in outflows during November. This puts the investment vehicle on track for its worst month since launching.

The average cost basis for Bitcoin ETFs stands at about $89,600. Bitcoin fell below this level on Tuesday, putting the average ETF investor underwater. Long-term Bitcoin holders were responsible for most of the selling in October and November, according to Bloomberg ETF analyst Eric Balchunas.

Recent ETF Launches Show Mixed Results

Canary Capital’s XRP ETF launched on Thursday with $58 million in first-day trading volume. This made it the most successful ETF launch in 2025. However, XRP’s price declined by approximately 13% over the following week.

The disconnect between trading volume and price performance reflects broader market pressures. Heavy capital outflows from crypto ETFs are adding downward pressure on cryptocurrency prices.

Market analysts have debated the reasons behind Bitcoin’s recent price decline. Bitcoin fell to its lowest level in almost eight months. Some observers initially blamed the US government shutdown or concerns about an AI bubble.

Analysts Point to Leverage as Main Culprit

Onchain analyst Rational Root dismissed the government shutdown theory. He said Bitcoin’s drop from its all-time high of $125,100 in October was likely due to excessive futures leverage.

Bitcoin analyst PlanB also rejected the AI bubble theory. He pointed to Nvidia’s strong earnings report as evidence. Nvidia reported record revenue of $57 billion for its third quarter, beating Wall Street projections.

PlanB said only two main reasons remain for Bitcoin’s decline. These are the four-year cycle pattern and delayed global liquidity. The four-year cycle narrative may be breaking due to institutional adoption.

Global liquidity, often tracked using the M2 money supply, affects Bitcoin prices. Strike CEO Jack Mallers recently stated that Bitcoin is highly sensitive to liquidity changes.

Rational Root said Bitcoin now has a clean slate for potential upside. He noted that Bitcoin has experienced three resets comparable to bear market levels during the current bull market. Each reset has allowed Bitcoin to move higher afterward.

Bitcoin ETF investors held steady despite October’s market crash, with only about $1 billion in outflows following the crash. The SEC’s potential increase in ETF approvals during 2026 could bring renewed investor interest to digital asset markets.

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