Bloomberg Analyst Warns Many Crypto ETPs Could Face Liquidation by 2027

Highlights:

• A Bloomberg analyst warned that more than 100 crypto ETPs expected in 2026 may not last.
• He said some liquidations could start at the end of 2026 and most could continue through 2027.
• The closure of ARKY and ARKC this year shows how quickly new crypto ETPs can fail in the market.

The crypto market is expected to see over 100 new exchange-traded products in 2026. Bloomberg analyst James Seyffart said he agrees with Bitwise’s forecast. Many of these products may not survive because investor demand might be low.

Seyffart said more than 126 crypto ETP applications are waiting for approval from the U.S. Securities and Exchange Commission. “Issuers are putting out a lot of products,” he said. This shows that many could be liquidated. Seyffart added that some liquidations might happen at the end of 2026. Most are likely to continue through 2027. This shows new products face challenges in getting enough investment.

I'm in 100% agreement with @BitwiseInvest here. I also think we're going to see a lot of liquidations in crypto ETP products. Might happen at tail end of 2026 but likely by the end of 2027. Issuers are throwing A LOT of product at the wall — there's at least 126 filings https://t.co/eOmeUIKXFZ pic.twitter.com/UELUKUng7Y

— James Seyffart (@JSeyff) December 17, 2025

Statistics indicate that a total of 622 ETFs closed shop last year worldwide, including 189 in the U.S., as reported by The Daily Upside. According to Morningstar, in 2023 alone, 244 ETFs closed shop in the U.S., with an average age of 5.4 years. In most cases, low inflows into these funds contributed significantly to such closures, resulting in inadequate management of funds under such ETFs. Analysts fear that crypto ETPs will face the same fate if investors show low interest.

Issuers have already liquidated several crypto ETPs this year, most notably ARK 21Shares’ ARKY (Active Bitcoin Ethereum Strategy ETF) and ARKC (Active On‑Chain Bitcoin Strategy ETF). These closures show that new products can fail quickly.

SEC Rules Could Boost Launches

Industry observers expect a significant rise in crypto ETP approvals in 2026 under the SEC’s new generic listing standards. These rules give issuers a clearer, quicker way to launch and reduce backlogs. The rules were approved in September. They remove the need for separate 19(b) approvals for qualifying crypto ETPs. Issuers can now choose accelerated or automatic approval under Rule 461.

BOOM: SEC has approved the generic listings standards that will clear way for spot crypto ETFs to launch (without going through all this bs every time) under '33 Act so long as they have futures on Coinbase, which currently incl about 12-15 coins. pic.twitter.com/E9FXrniXRS

— Eric Balchunas (@EricBalchunas) September 17, 2025

Even before new standards were introduced in September 2025, asset managers filed ETFs linked to highly speculative tokens. This included Melania Trump’s memecoin, showing a growing appetite for riskier launches. ETFs tracking Litecoin, Solana, and XRP launched successfully this year, following the Bitcoin and Ether ETFs introduced last year. Despite this, analysts caution that not all new products will attract strong investor interest.

Crypto ETP Growth Outpaces Demand

The surge in new crypto ETPs is much higher than actual investor demand. This suggests that many products may be consolidated by 2027. Only those that attract enough investment are likely to survive. The early liquidations this year, such as ARKY and ARKC, illustrate that the market remains vulnerable. Analysts have noted that if the flow of funds does not continue, there could be swift closures for the majority of the emerging ETPs. Seyffart’s comments and past ETF trends indicate that the next two years will test the strength of the crypto ETP market.