Why the SEC delayed the PENGU ETF decision: This is not a rejection, but a sign that crypto ETF approvals are accelerating

The U.S. Securities and Exchange Commission (SEC) recently extended the decision deadlines for two crypto ETF applications, including the Canary Pudgy Penguins (PENGU) ETF and the T. Rowe Price Active Crypto ETF. This seemingly delayed decision actually reflects the accelerating process of crypto assets entering the mainstream financial system.

What does the SEC extension mean

This is standard regulatory procedure, not bad news

The SEC is processing these ETF applications through the 19b-4 process, which allows regulators to extend the initial decision window by up to 45 days. Extensions are common practice and usually indicate that the SEC needs more time for review, rather than a direct rejection. In contrast, outright denial would be more disappointing to the market.

According to the latest reports, Bloomberg analysts expect Morgan Stanley’s Bitcoin spot ETF application to be processed around March 23, indicating that the overall approval process for crypto ETFs is speeding up.

Why is the PENGU ETF attracting attention

PENGU is a relatively new coin launched on December 17, 2024, currently ranked 75th in the crypto market cap list. Being able to submit an official ETF application just one month after launch is uncommon in the crypto space. The current PENGU price is $0.011835, with a 24-hour trading volume of $18.955 billion, demonstrating market activity.

The fact that this coin is gaining ETF attention indicates a fundamental shift in traditional finance’s attitude toward crypto assets. From focusing solely on Bitcoin and Ethereum to considering emerging community-driven assets, this reflects an expanding scope of institutional investors.

Major trends in crypto ETF approval

Collective action by traditional financial institutions

According to recent reports, Morgan Stanley has applied for an Ethereum spot ETF, marking a significant step following the approval of Bitcoin spot ETFs. Morgan Stanley manages $1.5 trillion in client assets, so even a 1% shift toward Ethereum could bring an incremental $1.5 billion in buying volume.

This institutional involvement means:

• Bitcoin spot ETFs have attracted $58 billion in six months, proving the appeal of compliant crypto products
• Regulators’ stance on crypto is shifting from “security concerns” to “commodity classification”
• Wall Street is building a complete “crypto product line,” expanding from Bitcoin to Ethereum and other assets

Coordination between SEC and CFTC

The SEC’s extension for PENGU and T. Rowe Price crypto ETFs, along with the public consultation on a third crypto fund option, indicates that regulators are systematically advancing the standardization of crypto assets. The SEC’s recognition of Ethereum’s “commodity” status aligns with the CFTC’s longstanding position, weakening the previous stance that “ETH might be a security.”

Market impact assessment

Short-term: Price volatility may increase

Data shows that PENGU has fallen 2.12% in the past 24 hours and 5.07% over the past 7 days. This volatility may be related to market adjustments in expectations regarding ETF approval progress. However, over 30 days, PENGU has risen 7.34%, indicating investor optimism about its long-term prospects.

Long-term: Precursor to more capital inflows

The launch of ETFs generally signals increased retail and institutional capital entering the market. Once approved, these ETFs will provide investors with more convenient and compliant exposure to crypto assets, especially for traditional financial institutions that cannot hold cryptocurrencies directly.

Key points to watch

Summary

The SEC’s extension decision may seem like a waiting signal, but it actually represents a step in the accelerating process of crypto assets entering the mainstream financial system. The fact that PENGU, as a new coin, can obtain an ETF application reflects growing market interest in emerging crypto assets. More importantly, the participation of traditional financial giants like Morgan Stanley is transforming the entire crypto ecosystem.

These extensions are not rejections but preparations by regulators for more compliant products to come. For investors, the key is to observe whether these ETFs are ultimately approved and how their approval impacts market liquidity and prices. The shift of crypto assets from “marginal assets” to “mainstream assets” has already begun, and these ETF applications are just one sign of this process.