Crypto

Altcoin ETFs on the Horizon: Analysts Predict a Major Shift for Crypto Markets in 2025

12 hours ago
Bitcoin Ethereum News

In a historic change that may reshape the crypto investment landscape, Bloomberg analysts Eric Balchunas and James Seyffart have significantly upped the ante on the approval odds of a wave of spot altcoin ETFs.

In their latest analysis, they now rate most major altcoins with a 90%-to-95% chance of getting approved as ETFs in the U.S. by 2025, a development that would take institutional adoption of cryptos well beyond just Bitcoin and Ethereum.

Even if the precise timing of these approvals is unknown, the SEC’s increased interaction with issuers is a very good sign. It’s very clear that the SEC is working with these issuers very directly, and it’s very likely these products are going to get a green light now. If they do, and they’re Bitcoin ETFs, then that’s clearly a very positive sign for the cryptocurrency ecosystem—just like the altcoin surge.

The Next Phase: Altcoin ETFs Could Spark a Full-Fledged Altseason

Analysts view the potential for multiple altcoin ETFs as a reason to now reshape expectations across the industry. They believe that the stage is now set for what could be a significant altseason—one not driven solely by retail hype, but also by serious institutional participation.

Several important altcoins, like Litecoin, Solana, and XRP, have already been applied for with the necessary authorities to set up Spot ETFs. Each of these assets now has a very good 95% likelihood—a number that regulators and businesses alike can get behind—of being approved within the next year. Close on their heels are a few other popular cryptocurrencies, like Dogecoin and Cardano, which have a 90% likelihood of following suit in the same time frame.

Younger or lesser-known assets like Sui and TRON are said to be at the beginning stages of the ETF filing process. “Most of these approvals are expected to start rolling out from the third to the fourth quarters of 2025, making the second half of that year a potentially transformative period for the crypto market. We could actually see some of these assets potentially double or triple in value if their underlying technology proves out and if the ETF narrative plays out in an unimpeded manner. ”

This level of optimism stems from the approvals of spot Bitcoin ETFs, which were officially green-lighted in early 2024. These investment vehicles have helped drive demand for Bitcoin, pushing its price to new highs. Ethereum has followed closely behind in terms of price and has also received ETF approvals. Together, these developments position several other large-cap crypto assets as potential candidates for new ETF products.

What Makes ETF Approval So Important?

ETFs are an increasingly investor-friendly way to gain exposure to asset classes. Spot ETFs, which track the price of the underlying asset, allow individuals and institutions to invest in crypto assets through regulated financial products. They exist at the intersection of traditional finance and the decentralized world of blockchain.

Three key benefits come with each ETF approval: 1. Improved transparency: ETFs have simple and straightforward structures that investors can understand. 2. Enhanced market efficiency: ETFs contribute to market efficiency; they cannot be priced inaccurately for any sustained length of time without some form of arbitrage being executed. 3. Broadened access to investment opportunities: Whereas many of the indexes against which ETFs are benchmarked are not tradable themselves, the ETFs that track those indexes are.

Inflows from institutions. Huge investors—hedge funds, pension funds, and asset managers—almost always prefer to invest in products that are regulated. They can invest directly in crypto assets, but if they want to put in a huge amount of capital, they almost always go with a product like an ETF. Why? Because those products allocate capital to the underlying assets without requiring the institutions to deal with custody of the assets or with the kind of exchanges that are not regulated.

New investor accessibility. Exchange-traded funds (ETFs) make it simpler for ordinary investors to acquire altcoin exposure through traditional brokerage wrappers, IRAs, and 401(k) retirement accounts. This vastly widens the user base for these assets.

Legitimacy from regulations. When the SEC or any other regulatory body gives the nod to an asset’s framework, this kind of approval and oversight can only help in winning wider acceptance for the asset itself. Media exposure tends to follow. Such is the kind of long-term, sustainable path that any asset would hope to tread.

Spot Bitcoin ETFs clearly drove the dynamics described above. They were expected to bring in large amounts of inflows because they were expected to be very safe and also because they were the first Bitcoin ETFs that could be bought in the U.S. They were meant to track the spot price of Bitcoin. And they did. But also shortly afterward, in mid-2023, they sparked another wave of bullish momentum for Bitcoin itself and also for all other cryptocurrencies. Analysts now think we could see a similar wave of bullish momentum for altcoins if/when their own ETFs get launched.

TradFi Turns Its Gaze Toward Altcoins

This trend holds a broader implication: that conventional finance is now looking beyond just Bitcoin and Ethereum and is seriously considering a number of other cryptocurrencies as well. Large-cap altcoins, many of which have real-world utility and offer innovative uses of blockchain technology, are now in the sights of not just private wealth managers, but also standard portfolio managers and ETF providers.

If the current odds are to be believed, a trio of upcoming exchange-traded funds (ETFs) could pave the way for a profusion of ‘altcoin’ investing—those aren’t Bitcoin or Ethereum—in the financial mainstream. Should these funds see the light of day, 2025 may be remembered as the year of such ‘altcoin’ penetration in price structure.

The crypto market is primed for a new potential breakout, but this time it might not be Bitcoin leading the charge. Instead, the diverse and dynamic ecosystem of altcoins—especially the larger ones like Ethereum, Solana, and Ripple—could be the catalyst for the next crypto breakout. Why is this? It’s mostly down to ETF developments.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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Source: https://nulltx.com/altcoin-etfs-on-the-horizon-analysts-predict-a-major-shift-for-crypto-markets-in-2025/