More than 100 cryptocurrency exchange-traded products (ETPs) are expected to launch
in 2026, but a significant portion of them may fail to survive due to weak
investor demand, according to a leading ETF analyst.


Bloomberg Intelligence analyst James
Seyffart said he agrees with a recent prediction from crypto asset manager
Bitwise that the coming year will see an explosion of new crypto-linked ETFs
and ETPs. 



However, Seyffart warned that many of these
products are unlikely to gain enough traction to remain viable in the long
term.



“We’re going to see a lot of liquidations in
crypto ETP products,” Seyffart said on Wednesday. “That might happen at the
tail end of 2026, but it’s more likely by the end of 2027.”



Seyffart noted that issuers are aggressively
filing new products with U.S. regulators, with at least 126 crypto ETP
applications currently awaiting decisions from the Securities and Exchange
Commission. 



The surge reflects growing confidence among
asset managers following the approval and success of spot Bitcoin ETFs earlier
this year, which attracted billions of dollars in inflows.



However,
analysts caution that not all crypto ETPs will benefit from the same
level of investor interest. While Bitcoin and, to a lesser extent, Ether
products have demonstrated strong demand, more niche offerings tied to
alternative tokens, thematic strategies, or complex derivatives may struggle to
attract assets under management.



ETF closures are common across traditional
markets when products fail to reach critical mass, and crypto-linked ETPs are
expected to follow a similar pattern. 



Products with low trading volumes often face
high operational costs, making them economically unsustainable for issuers.



Bitwise’s forecast suggests that asset
managers are currently “throwing products at the wall” in hopes of capturing
market share in a rapidly evolving regulatory environment. But Seyffart
emphasized that market forces will ultimately determine which offerings
survive.



As competition intensifies, investors are
likely to gravitate toward highly liquid, low-cost products with clear exposure
to major digital assets. 



Analysts say the coming years could see a
wave of consolidation, leaving only a handful of dominant crypto ETPs after the
initial surge fades.



For now, the crypto ETF race continues, but
longevity may prove just as challenging as regulatory approval.