The NFT market hit a three-year low last year, with sales and trading volumes plunging nearly 20%. Collections like Pudgy Penguins, CryptoPunks, and Milady Maker all took a beating, shedding 30%, 7%, and 17% of their value, respectively. But for Canary Capital’s Steven McClurg, this isn’t a death spiral - it’s an opening act.

Now that the SEC has ruled digital art and collectibles aren’t securities, McClurg sees a shift. The biggest barriers are gone. The path is clearer. And the idea of an NFT-backed ETF - once laughable - now feels inevitable. Liquid digital art is emerging, and an SEC that’s warming up to actively managed crypto products changes the game.

Canary Capital wasted no time. Ten days ago, it filed for a Pudgy Penguins and PENGU ETF, igniting a firestorm on Crypto Twitter. Skeptics dismissed it as a stunt, a gimmick to pump floor prices. But the broader picture suggests something bigger. The NFT market may be battered, but if institutions take the bait, it could be on the verge of a second act.

Meanwhile, another ETF fight is gaining momentum. The SEC is reviewing five XRP ETF applications, and the odds of approval have surged to 87% on prediction platform Polymarket. The lawsuit that once haunted Ripple is history. The SEC folded, dropping its appeal without conditions. JPMorgan estimates XRP ETFs could attract $8 billion in their first year, and Northstake sees $800 million pouring in within the first week.

The big players haven’t made their move yet. BlackRock and Fidelity have stayed on the sidelines, but that’s likely to change. As ETF Store President Nate Geraci put it: “Seems obvious spot XRP ETF approval is simply a matter of time.” If that happens, XRP will join Bitcoin and Ethereum in the $104 billion crypto ETF market, setting off a chain reaction that could pull NFTs into Wall Street’s orbit faster than anyone expects.