2025-12-15 20:46:57

The ETF market could face significant headwinds next year. US regulators are considering a major shift—allowing asset managers to offer ETFs as share classes directly within mutual funds. Here's why market-making firms are watching closely.

This regulatory move could trigger a wave of new listings throughout 2026. On the surface, that sounds bullish. But for market makers, it's complicated. More ETFs flooding the market means thinner spreads, higher operational costs, and tighter margins.

The mechanics matter here. When mutual fund companies can issue ETFs as share classes, the barriers to entry drop dramatically. We're not talking about a trickle of new products—analysts expect a substantial increase in offerings. That volume works against the market-making ecosystem, which relies on concentrated liquidity pools.

Market-making firms will likely need to adapt their strategies. Either they double down on technology and capital deployment to handle the increased volume, or they risk losing market share to more agile competitors. The efficiency gains from streamlined operations could offset some pressure, but the fundamental dynamic remains challenging.

Bottom line: 2026 might test the resilience of market makers in the ETF space. Those unprepared for rapid market expansion could face meaningful pressure on profitability.

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PaperHandSister

· 2025-12-18 18:57

The recent regulatory actions on ETFs, to put it simply, mean more players are entering, but the cake remains the same... spreads are being squeezed tightly. --- By 2026, the retail investors need to step up, or they'll be eaten alive—no suspense there. --- Once these rules change, small investors will be cut again. The seemingly good liquidity is actually a trap. --- Wait, isn't this just giving big asset management firms money? Lowering the barriers allows them to issue ETFs at will... --- Spreads narrowing may seem insignificant, but for market makers, it's a matter of life and death—it's tough. --- Problems that can't be solved with technology and capital alone require a regulatory rethink, and the entire ecosystem must be reorganized. --- Another wave of new ETF launches, leading to liquidity fragmentation, and in the end, institutions still dominate and thrive.

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UnluckyMiner

· 2025-12-17 09:32

ETF this wave is going to crash the market, the spread is about to disappear --- Another new way to cut leeks this year, market makers should be crying --- Basically, it's increased competition. Smaller market makers will have to eat dirt --- By 2026, let's see who can survive; those who don't upgrade their tech stack probably won't make it --- This round of regulatory changes is quite harsh; liquidity fragmentation is happening directly --- Haha, let's see how the brokerages respond. The bulls' success depends on whether market makers can hold up --- Only leading market makers have a chance to survive; retail-level ones are directly out of the game

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DegenApeSurfer

· 2025-12-17 00:48

NGL, the spreads are about to be squeezed dry. The regulatory reforms in 2026 are really digging a hole for market makers.

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AirDropMissed

· 2025-12-15 21:10

ngl the spread is going to be squeezed tightly now... --- MMs need to toughen up, or they will really be beaten. --- Wait, does this mean lowering the threshold for ETF listing? Won't that cause liquidity to become more dispersed... --- 2026 will be a survival test for market makers. Those without technical reserves might be doomed. --- It sounds like good news, but actually, it's a bomb for MMs... --- So I need to watch which MMs can survive, whether to buy the dip or to run... --- Lower barriers to entry, and everyone will rush in... Can the spread survive? --- This time, the capital-intensive advantage will become evident. Sorry, little MMs. --- I just want to know if this will affect the trading volume of existing ETFs...

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MonkeySeeMonkeyDo

· 2025-12-15 21:10

The ETF market is cooling down, spreads are getting thinner, and market makers will need to tighten up by 2026. --- Basically, the entry barriers are lowering, allowing small players to get involved. Liquidity pools are being fragmented, and no one will have an easy time. --- Market makers either spend money to upgrade their technology or wait to be crushed—they have no third option. --- With this policy rollout, it feels like big fish are eating small fish again, and only the leading market makers will survive. --- I just want to know if there will be another round of reshuffling, with a bunch of projects dying out. --- It sounds like liquidity will improve, but the margins being squeezed—that's the real problem. --- 2026 is destined to be chaotic, with unprepared players being eliminated straight away. We've seen this routine in crypto before.

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hodl_therapist

· 2025-12-15 21:07

ETF this time is going to fail... the spread is so thin it's negligible --- Basically, MM traders are going to get wiped out; 2026 is destined for a bloody battle --- Wait, is this trying to push everyone into public chains... Can traditional finance still be saved? --- Without the spread, there's no profit—it's as simple and brutal as that --- Either innovate with technology or be eliminated; the market is this ruthless

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GateUser-afe07a92

· 2025-12-15 21:04

Sounds like the SEC is about to cause trouble again, the market teachers are about to split... --- Same old story, lowering the barriers and flooding the market, it's good enough if the spread can survive --- Should we buy the market maker's stocks in 2026? Do a reverse operation? --- That's why big players are stockpiling spot assets, centralized exchanges are about to be impacted --- Wait, is this about ETFs being reshuffled or market makers getting the cold shoulder... it's a bit confusing --- It doesn't matter, someone will always make money and someone will always lose money, it just depends on which side you're on

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token_therapist

· 2025-12-15 21:00

The ETF market will start to intensify next year... spreads are going to be killed off.

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WhaleStalker

· 2025-12-15 20:52

ngl, market makers are really about to get wiped out... spreads are getting thinner and thinner, it's a bit scary Are retail investors ready to buy the dip? I think this wave presents a good opportunity In the 2026 ETF chaos, those who can't keep up with the technology will be eliminated directly, fitting Darwin's law It's another spread war... I've seen enough of these years, in the end, it's still about the top players Market makers are crying, but for us quantitative traders... hee hee

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GateUser-7b078580

· 2025-12-15 20:47

Data shows that liquidity will be dispersed, and spread compression is already inevitable... Let's wait and see how it specifically collapses next year.

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