Bitwise Files S-1 for Sui ETF as Fifth Issuer Races Into Layer-1 Altcoin Market

Key Insights:

• Sui became the target of five crypto ETF filings as Bitwise joined four existing applicants racing to capture exposure to the layer-1 blockchain.
• Bitwise predicted more than 100 crypto-linked ETFs would launch in the U.S. during 2026 following the SEC’s October 2025 publication of generic listing standards.
• The only live Sui-related product, 21Shares’ 2x Long Sui ETF, held $1.22 million in AUM as of December 17, representing a fraction of recent XRP and Solana launches that attracted hundreds of millions.

Bitwise filed an S-1 registration statement with the SEC on December 18 for a spot Sui ETF, becoming the fifth issuer targeting the layer-1 blockchain as the firm’s predicted “ETF-palooza” accelerated into altcoin markets.

The filing joined at least 126 crypto ETF applications awaiting regulatory review as the SEC’s October 2025 generic listing standards opened the floodgates for specialized digital asset products.

Bloomberg ETF analyst James Seyffart noted that issuers have thrown “a lot of product at the wall,” with at least 126 crypto ETF filings pending regulatory review.

Bitwise’s prediction called for more than 100 crypto-linked ETFs to launch during 2026, with the firm pointing to the SEC’s publication of generic listing standards as the catalyst for the expansion.

The generic standards allowed issuers to launch products under a general set of rules rather than requiring case-by-case approval for each cryptocurrency.

Seyffart expressed 100% agreement with Bitwise’s forecast, adding that the market would likely see substantial liquidations in crypto ETP products by the tail end of 2026 or through 2027.

The analyst characterized the current filing wave as a product-market fit test where issuers competed to capture first-mover advantage in specialized altcoin categories.

Sui Market Shows Small Traction Despite ETF Optimism

The Sui market demonstrated limited institutional product penetration as of mid-December 2025, with only one live US-listed product providing exposure to the blockchain.

The 21Shares 2x Long Sui ETF (TXXS) launched on December 4 and managed $1.22 million in AUM as of December 17, according to 21Shares’ website.

Trading volume for TXXS reached $2.5 million since launch, reflecting modest investor interest in the leveraged product.

The 2x Long structure provided double the daily price movement of Sui, positioning the ETF as a trading vehicle rather than a long-term holding for institutional portfolios.

The absence of a spot Sui product represented a significant gap in the market structure, with leveraged exposure attracting a different investor profile than direct cryptocurrency holdings, especially during the recent downturns.

Spot products historically captured substantially larger asset flows from institutional and retail investors seeking straightforward exposure without leverage mechanics.

Additionally, recent crypto ETF launches established demanding benchmarks for new altcoin products entering the market.

Spot XRP ETFs accumulated $1 billion in combined AUM across seven products as of December 18, with the first spot XRP ETF launch reaching $58 million in daily volume.

Solana spot ETFs also attracted strong institutional interest, with Bitwise’s BSOL recording $57 million in volume on its debut.

VanEck’s VSOL and other competing products contributed to 14 consecutive days of net investor support as of mid-November 2025, contrasting with outflows from Bitcoin and Ethereum products during the same period.

Generic Standards Enable Altcoin Expansion

The SEC’s publication of generic listing standards created a clearer regulatory roadmap for specialized cryptocurrency products, removing the case-by-case approval bottleneck that constrained earlier ETF launches.

The framework allowed issuers to file applications under standardized rules covering custody, surveillance-sharing arrangements, and market structure requirements.

Bitwise characterized the regulatory shift as setting the stage for “ETF-palooza” in 2026, with the firm projecting exponential growth in approved products.

The prediction assumed continued regulatory clarity under a crypto-friendly administration and sustained institutional demand for diversified digital asset exposure.

The filing wave included products targeting various market segments, from major layer-1 blockchains like Sui and Avalanche to DeFi tokens and sector-specific baskets.

Issuers calculated that early approval could establish brand recognition and capture market share before competitors launched similar products.

Seyffart’s forecast of coming liquidations reflected concerns about product viability in an oversaturated market.

Historical precedent from traditional ETF markets showed that products failing to achieve critical mass in AUM faced closure within 18-24 months of launch, particularly in crowded categories with limited differentiation.

The Sui blockchain entered the crypto ETF competition with limited proven institutional demand, relying on blockchain fundamentals and ecosystem development to attract capital.

The layer-1 platform competes against established alternatives, including Solana and Ethereum layer-2 solutions for institutional portfolio positioning.

The $1.22 million in AUM for TXXS served as a baseline for Sui’s interest, though the leveraged structure complicated direct comparisons with spot products.

In addition to attracting investors through its fundamentals, Sui ETFs’ success depends on broader market conditions and Sui’s differentiated value proposition.