James Seyffart warns many crypto ETPs may not survive past 2027

Bloomberg Intelligence crypto ETF analyst James Seyffart claimed on December 17 that crypto ETPs could face a surge in liquidations by the end of 2027. The analyst emphasized that issuers are currently launching a large number of products, with at least 126 filings with the U.S. SEC still pending approval.

Seyffart agreed with Bitwise’s projection that many of the over 100 ETPs waiting for U.S.-listing approval might receive the green light in 2026 but may not survive until the end of the year. Additionally, those who manage to cross to 2027 may not see the end of that year. The analyst believes that the lack of demand could be the main reason for these projected mass ETP liquidations.

For perspective, nearly 746 ETFs reportedly debuted in 2024, and approximately 800 new funds entered the market in the first nine months of 2025 alone, as the number of ETF launches surged. Asset flows also rose, with net YTD sales topping $1.1 trillion as of October 2025. However, closures also remained steady, with 266 funds shuttered in the first half of 2025, compared to 253 that closed during the same period in 2024, according to ETFGI data. Those numbers could rise as new products continue to struggle to acquire the necessary assets to survive.

Rosenbluth agrees that many ETFs are going to close

Todd Rosenbluth, the head of ETF trends research at VettaFi, is also concerned that an excessive number of ETPs are being introduced, and some of them may close. He noted that the reason why BlackRock or any other large asset manager is not closing its popular ETFs is that it has too many of them. They are pulling inventory off the shelf that is not selling to make room for products that are more likely to sell.

Greg Stumm, the CEO and president of American Beacon Advisors, also emphasized that new assets may not last, despite issuers launching funds at a rapid pace. He initially believed that half of the 11 U.S.-listed spot Bitcoin ETFs would have closed by now, but noted that even the small ones are now worth over $500 million.

Meanwhile, ETFGI reported a total of 622 closures in 2024, with the U.S. accounting for the highest number at 196. On the other hand, there were 179 closures in the first four months of 2025. In 2023, there were 244 ETF closures with an average age of 5.4 years and an average AUM (assets under management) of about $54 million.

Several popular ETPs, including ARK 21Shares’ ARKY (ARK 21Shares Active Bitcoin Ethereum Strategy ETF) and ARKC (ARK 21Shares Active On-Chain Bitcoin Strategy ETF), have already been liquidated this year. These investment products ended up shutting down because they failed to attract enough inflows for sufficient AUMs.

New U.S. SEC listing guideline to speed up ETF approvals

The U.S. SEC introduced new listing guidelines that could speed up ETF approvals, providing issuers with a faster and clearer path to market and reducing the backlog of shutdowns. The generic listing standards were approved in late September, and they removed the need for individual 19(b) approvals for qualifying crypto ETPs.

The new U.S. SEC guidelines also allow issuers to choose between requested accelerated effectiveness and automatic effectiveness under Rule 461 for faster launches. The agency approved generic listing standards for commodity-based trust shares on the New York Stock Exchange, the Arca, the Nasdaq, and the Chicago Board Options Exchange, BZX Exchange.

The U.S. SEC Chair Paul Atkins believes the new listing guidelines will reduce barriers to access crypto-related products and provide investors with more choices. James Selway, Director of the Division of Trading and Markets, added that the commission’s approval of generic listing guidelines provides investors with much-needed regulatory clarity and certainty.