Cryptocurrency ETF Divergence Worsens: PENGU Loses Favor, Traditional Asset Management Products Take Center Stage

SEC’s approval delay once again signals the beginning of differentiation in the crypto ETF market. According to the latest disclosed documents, the U.S. Securities and Exchange Commission has decided to extend the review period for Canary’s Pudgy Penguins (PENGU) ETF and T. Rowe Price’s actively managed cryptocurrency ETF, while also initiating a review process for Grayscale’s options trading. Behind these actions, the SEC’s differentiated attitude toward various types of crypto asset products is reflected.

Why the SEC Delayed Approval

Cautious assessment under the 19b-4 mechanism

Both applications are under the SEC’s 19b-4 review process. According to regulations, the regulatory authority has the right to extend the approval period by up to 45 days beyond the initial deadline to further evaluate market structure, investor protection, and potential manipulation risks. An extension does not mean rejection but indicates that the SEC needs more time to assess risk boundaries.

This move sends a clear signal: the SEC’s attitude toward crypto ETFs in 2026 is “possible, but with caution.”

Differentiated treatment of the two products

Why PENGU Has Become a “Difficult Case”

Pudgy Penguins originates from a well-known NFT series. PENGU tokens launched on December 17, 2024, with a current market cap of $743.97 million and a 24-hour trading volume of $189.55 million. The reason this project has prompted SEC caution mainly lies in its ambiguous nature.

Can NFT assets enter the ETF framework?

The PENGU ETF’s uniqueness is particularly prominent. The fund plans to invest in Pudgy Penguins-related ecosystem assets, which the market interprets as the SEC testing whether NFT and internet culture assets are suitable for inclusion in a regulated ETF product framework. In other words, the SEC is asking a fundamental question: Are the risk characteristics of assets like NFTs clear enough to be institutionalized, similar to Bitcoin and Ethereum?

This is not a rejection of PENGU but a boundary-setting.

Why T. Rowe Price’s application is relatively smooth

In contrast, T. Rowe Price’s crypto ETF leans more toward a traditional institutional style. As a globally renowned asset management firm, its actively managed fund covers a broader range of digital assets. This strategic layout shows that traditional asset managers are gradually deepening their involvement in the crypto market through diversification strategies.

The SEC’s review pressure on such products is relatively smaller because they are backed by institutional credibility, and their risk management frameworks are more mature.

The Additional Implication of Grayscale’s Options Trading

Simultaneously entering the public consultation phase is Grayscale’s CoinDesk Crypto 5 ETF options trading proposal. If approved, this would mean the expansion of hedging and risk management tools, evolving from single-asset to multi-asset derivatives structures. This is a significant positive for institutional investors and reflects the SEC’s gradual relaxation of derivatives regulation.

The True Pace of the Crypto ETF Market in 2026

Expansion but not out of control

From Morgan Stanley’s submission of three crypto ETF applications within 24 hours on January 10, to the advancement of the Clarity Act in Congress, the crypto ETF market in 2026 is clearly accelerating. However, the SEC’s delay decision indicates that this expansion is paced and carefully evaluated.

A watershed for institutionalization

Relevant information shows that traditional financial giants like Morgan Stanley and Goldman Sachs are rapidly “catching up.” Goldman Sachs analysts point out that the ongoing improvement in the regulatory environment is a key factor driving further institutional adoption of crypto assets, and the Clarity Act’s progress will clarify the regulatory framework for tokenized assets and DeFi, delineating the responsibilities of the SEC and CFTC.

All these point in the same direction: the institutionalization of crypto assets is no longer just a slogan but is becoming a reality.

Personal opinion

From the regulatory actions, the SEC is not suppressing crypto ETFs but is establishing a clearer evaluation system. The delay in PENGU’s approval precisely indicates that the SEC is willing to evaluate emerging asset classes rather than outright reject them. This attitude is a positive signal for the entire industry.

Summary

The SEC’s delay in approval is not bad news but a sign that the crypto ETF market is maturing. The differentiated treatment of the two products reflects that the SEC is establishing clear compliance pathways for different types of crypto assets—traditional assets (Bitcoin, Ethereum) are progressing quickly, while emerging assets (NFT-related) require more assessment.

The crypto ETF market in 2026 is still expanding, but the pace emphasizes compliance and prudence. This is a necessary stage before large-scale institutional capital enters. When rules become clearer, funds will be more willing to invest confidently.