Bitcoin pulls back, altcoin ETFs surge Up, the altcoin market is finally starting to come to life. But the situation was very different a few days ago, when Bitcoin was approaching $100,000, but altcoins were wailing at every turn, and the market was in a state of existential death.

Altcoins are bleak, but Wall Street is eyeing them. Under the unprecedented regulatory favorable conditions, Wall Street has set its sights on altcoin ETFs, which has also ignited the winter fire for the long-dormant altcoin market.

Just a week ago, Bitcoin continued to exceed US$99,000, ranking on the major Media headlines, but the usually active community fell into rare silence. In this round of bull market led by institutions, most market participants did not receive liquidity overflow. Instead, their altcoins were continuously sucked away by Bitcoin, showing a negative growth trend. Compared with the vigorous bull market propaganda, participation in The person's heart is miserable.

A typical example is Ethereum. Compared with other altcoins, ETH is already recognized as a mainstream currency, but judging from the price trend, the relative increase is far away. Not as good as Bitcoin. The exchange rate between ETH and BTC has continued to fall this year, falling from 0.053 to 0.032, and has only recently begun to rebound. This is true even for Ethereum, and even more so for other currencies.

Wall Street veterans have also begun to play with altcoins

But just recently, the dormant altcoin market seems to be active again, with currencies such as SoL, XRP, LTC and Link in the First launched last weekend, Solana’s DEX average daily trading volume exceeded US$6 billion, and XRP soared to US$1.63. This morning, Ethereum rose strongly to exceed US$3,600, the altcoin sector experienced general gains, and the Defi sector rose 8.47% in 24 hours.

When it comes to the reasons for the rise of altcoins, in addition to the positive emotions brought by the bull market, the contribution of Wall Street is indispensable, and ETF is the most intuitive presentation.

Dating back to the beginning of this bull market, 11 Bitcoin spot ETFs set off a craze. The entry of Wall Street giants such as BlackRock and Fidelity has promoted the mainstreaming of Bitcoin and quickly lowered the threshold for participation in the crypto market. At that time, Bitcoin and Ethereum spot ETFs were approved one after another, and the market had different opinions on the next token that would excite Wall Street. Due to market value and capital considerations, Solana was once the most popular currency.

On June 27, asset management giant VanEck took the lead in submitting Form S-1 regarding the "VanEck Solana Trust" to the SEC. 21Shares followed suit the next day, filing an S-1 application. On July 8, Cboe, the Chicago Board Options Exchange, officially submitted the 19b-4 documents for VanEck and 21Shares’ Solana ETF, pushing this wave of SOL ETF speculation to a climax.

The good times did not last long, and the SEC’s tough attitude quickly cooled down this altcoin ETF. In August, market news said that CBOE had removed the 19b-4 applications for two potential Solana ETFs from the "Pending Rule Changes" page of its website, and analysts bluntly stated that there was "no hope of passing."

But now, the market is still there, but the situation is very different. On November 22, Cboe BZX exchange documents showed that the exchange planned to list and trade four Solana-related ETFs on its platform. The ETFs, sponsored by Bitwise, VanEck, 21Shares and Canary Funds respectively, are classified as “commodity-based trust fund shares” and filed under Rule 14.11(e)(4). If formally accepted by the SEC, the final approval deadline is expected to be early August 2025.

Not only Solana, there are more ETFs on the way. In the past month, crypto investment company Canary Capital submitted spot ETF applications for XRP, Litecoin, and HBAR to the U.S. SEC. According to ETF Store President Nate Geraci, at least one issuer is currently trying to apply for an ADA (Cardano) or AVAX (Avalanche) ETF.

Wall Street veterans are also starting to play with altcoins

The emergence of altcoin ETFs has triggered widespread heated discussion, and the inflow of funds from afar has made the market boil. Is the Wild West of Crypto ETFs Really Coming?

From an objective point of view, looking back at the approval process of Bitcoin and Ethereum, there are two implicit requirements for cryptocurrency to be approved as a spot ETF. It is not clearly recognized as a security by the China Securities Regulatory Commission; secondly, it must have leading indicators to prove market stability and non-manipulation. A typical feature is that the tokens can be traded in the U.S.Trading on the Chicago Mercantile Exchange (CME) in China, that is, the futures market was launched for the first time. From this perspective, except for Bitcoin and Ethereum, no one in the current encryption market seems to meet the standards. It is even more difficult to get approval for currencies with a higher degree of centralization. SOL, in particular, is not only highly centralized, but was also clearly listed as a security in the U.S. SEC’s accusation against Binance.

However, despite this, the market is still positive about the approval of SOL and XRP ETFs. James Seyffart, an authoritative Bloomberg ETF analyst in the field of ETFs, believes that the decision-making and approval timetable for SOL, XRP, LTC and HBAR ETFs may be extended to the end of 2025, and the SEC may approve Solana-related ETFs within two years. ETF Store President Nate Geraci is more optimistic, saying that the Solana ETF is very likely to be approved before the end of next year.

There is naturally information supporting optimism, and the core factor points to the incoming President Trump. Trump’s promises on encryption are being actively fulfilled, and changes in the internal and external regulatory environment have given the cryptocurrency industry more confidence.

In terms of industry regulation, the SEC, as the main regulatory authority for cryptocurrency, is about to usher in a major Blood transfusion. Current SEC Chairman Gary Gensler voluntarily resigned and announced his resignation on January 20, 2025, the day Trump officially took office, finally pressing the pause button on the SEC's strict supervision in recent years. According to statistics, during his tenure, Gensler took enforcement actions against multiple entities such as Coinbase, Kraken, Robinhood, OpenSea, Uniswap, MetaMask, etc., completed thousands of enforcement cases, recovered approximately US$21 billion in fines, and became a well-known opponent of encryption in the industry. .

Although the next SEC chairman has not yet been selected, people familiar with the matter said that former SEC commissioner Paul Atkins may succeed Gary Gensler. As the debate over cryptocurrency securities intensifies, there are also rumors that Trump hopes to expand the powers of the Commodity Futures Trading Commission (CFTC) and strengthen its regulatory powers in the field of digital assets. If this move comes to fruition, the security properties of cryptoassets may be diluted.

From the perspective of the broader external environment, Trump can be called a gathering place for cryptocurrency players. Among all Trump’s new cabinet ministers, except for market familiarity such as Musk and Howard Lutnick,In addition to the well-known names, Treasury Secretary Scott Bessant, Security Advisor Michael Walz, Intelligence Director Tulsi Gabbard, Commerce Secretary Howard Lutnick, Health and Human Services Secretary Robert F. Kennedy Five other members are supporters of cryptocurrency. Among them, Walz, Lutnick, and Gabbard actually hold cryptocurrency. Lutnick is a huge fan of Bitcoin and not only holds hundreds of millions of dollars in Bitcoin, but his company, Cantor Fitzgerald, has also provided custody services for Tether for many years.

Obviously, the composition of this session is completely different from the previous one. Since the superstructure is mostly supportive, the regulation of cryptocurrency will inevitably be relaxed. . If a comprehensive regulatory framework for crypto assets is built during this term, the subsequent industry regulatory direction will be clearer.

In addition to regulation, Trump's companies have already targeted business opportunities in the past, and have recently made frequent moves to expand the encryption industry through investment and financing. . According to market sources, Trump Media Technology is in talks with Intercontinental Exchange (ICE) to discuss the proposed acquisition of cryptocurrency exchange Bakkt. Just recently, Trump Media Technology Group submitted an application for a cryptocurrency payment service called Truth Fi, planning to enter the field of crypto payments. The company’s moves once again reflect the president’s positive attitude toward cryptocurrencies.

It is based on the above factors that the market has rekindled hopes for altcoin ETFs. After all, with the resignation of the SEC chairman, the securities debate surrounding altcoins is expected to end.

On the other hand, even if the direction of altcoin ETFs is difficult to predict, Wall Street is unwilling to give up on this huge market of more than 3 trillion. Traditional institutions are building new investment products and derivatives around crypto-assets to make it easier for investors to include crypto-assets in their asset portfolios.

Sui Chung, who runs crypto index provider CF Benchmarks, said that mainstream investors will establish direct general exposure trends through spot Bitcoin ETFs, as well as through additional Products tailor exposure to asset classes. Among the most popular products are those involving commodity futures that are tied to cryptocurrencies and yield yields, as well as those that offer downside protection through options. Currently, the company is planning to launch Nasdaq Bitcoin Index options.

Astoria Portfolio Advisors chief investment officer John Davi also mentioned that he is currently considering investing in the ET he runsAdd Bitcoin exposure to the F-model portfolio.

Overall, although the altcoin ETF boom is still difficult to achieve under the current regulatory background, in the long term, with the relaxation of regulations and investment With the increasing interest of investors, it will become an objective reality for institutions to conduct in-depth research on crypto assets in order to obtain traffic and compete in the market. On the product side, institutions will no longer be limited to Bitcoin and Ethereum, the productization and standardization of crypto assets will be further strengthened, and derivatives may usher in a blowout, aiming to clear obstacles for investors to enter the market. It is foreseeable that investors will have more ways to invest in cryptocurrency-related products.

In addition to new products not yet launched, existing ETFs will also benefit from this A trend. Taking the Ethereum spot ETF as an example, the capital inflow of the Ethereum spot ETF has been weaker than that of Bitcoin in the long term. Data shows that as of November 27, the net inflow of Ethereum spot ETF funds was approximately US$240 million, while the net inflow of Bitcoin spot ETF funds was as high as US$30.384 billion. There is a huge difference between the two.

As for the reason, Ethereum is already at a disadvantage compared to Bitcoin due to differences in value firmness and positioning, and its core pledge function was rejected by the SEC and restrictions once again diluted investor enthusiasm. From a cost perspective, if investors directly hold ETH, they can obtain nearly 3.5% of the staking income. However, if they hold institutional ETFs, they will not only not be able to obtain this risk-free income, but they will also have to pay an additional 0.15% to 2.5% to the issuer. Varying management fees.

However, with the changes in regulation, Ethereum spot ETFs may not be without Staking. After all, the attitude of the SEC, which had previously firmly opposed Staking, has changed, and there is also a precedent in Europe. Recently, European ETP issuer 21Shares AG announced that it will add staking functionality to its Ethereum core ETP product.

Of course, although ETFs are good, the actual capital inflows have yet to be verified. Even Ethereum has limited appeal to traditional capital. The total assets of Grayscale's Solana Trust are only US$70 million, and the investment purchasing power of altcoins does not seem to be as optimistic as imagined. Affected by this, Robert Mitchnik, head of BlackRock's digital assets department, once mentioned that the company has little interest in other crypto products besides Bitcoin and Ethereum.

However, no matter how the subsequent approval progresses, the hype surrounding copycat ETFs hasSuddenly opened, this shot in the arm came too timely for the long-suffering copycat market.