Concerns Over Bitwise’s 11th Crypto Prediction: A Warning from James Seyffart

As the US crypto ETF (exchange-traded fund) market approaches a critical point, Bitwise Asset Management forecasts the introduction of over 100 new crypto-linked ETFs by 2026. This anticipated growth is spurred by new listing standards from the SEC, effective from October 2025.

Key Takeaways

Bitwise anticipates a surge in crypto-linked ETFs, with over 100 launches projected by 2026.
The SEC’s new regulatory framework aims to simplify ETF listings, promoting institutional interest.
Seyffart warns of potential liquidations in the crypto ETF sector by late 2026 or 2027.
Bitcoin remains the leading asset in crypto ETFs, while altcoins face saturation risks.
Investors need to be discerning due to market congestion and the potential failure of many ETFs.

Despite the optimism surrounding potential record highs for Bitcoin, Ethereum, and Solana, Bloomberg ETF analyst James Seyffart warns of the likelihood of a substantial shakeout in the industry due to overcrowding.

Bitwise’s 11 Predictions for 2026

Bitwise has made a total of 10 projections for 2026 that cover both the crypto and ETF markets, which investors will need to monitor closely.

Expected ETF Liquidations in 2026

The eleventh prediction highlights a growing concern among analysts. With the anticipated influx of new crypto-linked ETFs, a major regulatory shift has preceded this development. In September 2025, the SEC issued generic listing standards for commodity-based trust shares, including those tied to crypto assets.

“[Numerous leading exchanges] submitted proposed rule changes to the SEC to adopt generic listing standards for Commodity-Based Trust Shares. These proposals… went through a notice and comment period, and the SEC has approved them on an accelerated basis,” the SEC's filing noted.

This change allows ETFs to be listed without individual reviews, streamlining the process and alleviating uncertainties.

Bitwise predicts that this regulatory clarity will encourage institutional adoption and attract more investments into crypto ETFs in 2026.

In 2026, we anticipate the launch of more than 100 crypto-linked ETFs in the U.S., thanks to the SEC's new generic listing standards set to take effect in October 2025. A clearer regulatory environment in 2026 allows us to see the groundwork being laid for this growth. SEC Regulatory Framework — Bitwise (@BitwiseInvest)

“I completely agree with Bitwise on this point,” Seyffart stated. “I also foresee many liquidations of crypto ETP products. This could happen toward the end of 2026 or by the end of 2027. Issuers are introducing a vast number of products.”

Bitcoin’s Dominance and Altcoin Challenges

Current data from Bloomberg indicates there are 90 existing crypto ETPs managing $153 billion in assets, with 125 applications pending. Bitcoin leads the pack, holding $125 billion across 60 products, while Ethereum follows with $22 billion in 25 ETFs.

Conversely, altcoins like XRP and Solana contain fewer options, with 11-13 products each, managing around $1.5 to $1.6 billion, indicating increasing saturation risks.

As more products enter the market, analysts predict fierce competition for investor interest. However, historical data suggests a note of caution: around 40% of ETFs launched since 2010 have ultimately closed, often due to inadequate assets or low trading volume.

Seyffart’s caution underscores a larger worry that rapid growth often leads to consolidation. Crypto ETFs that struggle to attract sufficient assets under management (AUM), differentiate their offerings, or develop robust distribution networks might not survive.

Products that provide specialized exposure strategies, offer income features, or have well-defined risk profiles may find their footing in the marketplace.

Chris Matta, CEO of Liquid Collective, supports this perspective, highlighting the risks of “zombie” projects, defined as crypto assets with over $1 billion in market capitalization but minimal active development.

“The inability to sustain an ETF in trading markets may send a strong signal and lead to greater performance disparities between active and stagnant crypto assets,” Matta commented.

Consequently, investors entering the ETF landscape must exercise discretion. Factors like trading liquidity, tracking precision, fee structures, and the ethos of the issuer will be pivotal in distinguishing viable products from those likely to falter.

While Bitwise remains optimistic about leading ETFs tied to major cryptocurrencies enjoying sustained institutional investments, the predicted wave of liquidations by late 2027 could reshape the landscape, consolidating investments among the strongest offerings.

As the market evolves, the pressing question remains: In a congested ETF sector, which products will endure, and which will join the ranks of crypto's overlooked “zombie” assets?