Institutional investors might focus on altcoins as a new wave of cryptocurrency exchange-traded funds (ETFs) emerges in the United States, according to market analysts.
The US Securities and Exchange Commission (SEC) has received at least five new altcoin ETF applications in early October, despite the ongoing US government shutdown delaying progress.
Each approval could “unlock the next wave of institutional purchases,” said Leon Waidmann, head of research at Web3 analytics firm Onchain.
“Altcoin ETF inflows are the inevitable next step following the demonstration of institutional demand through Bitcoin and Ethereum ETFs,” Waidmann told Cointelegraph. “This reflects regulatory confidence translating into capital flows.”
Ether ETFs Outpace Bitcoin ETF Inflows in Q3
Spot Ether (ETH) ETFs attracted $9.6 billion in inflows during Q3 2025, surpassing the $8.7 billion generated by spot Bitcoin (BTC) ETF inflows, according to data aggregator SosoValue.
This shift indicates a growing institutional appetite for alternative crypto investments.
Waidmann suggested that altcoin ETFs could spark the next phase of institutional altcoin adoption as newly regulated vehicles, leading to years of consistent inflows.
“Institutions embraced Bitcoin through ETFs, now they’re transitioning to Ethereum, with other altcoins to follow.”
The most successful traders in the industry, known as “smart money” traders on Nansen’s blockchain intelligence platform, are also positioning themselves in anticipation of altcoin ETF approvals.
The Uniswap (UNI), Aave (AAVE), and Chainlink (LINK) were the three most held tokens by smart money traders on Thursday, data from Nansen reveals.
Related: Crypto treasuries siphon $800B from altcoins, and it might be ‘forever’
However, some analysts worry that BlackRock’s absence from the altcoin ETFs could lead to limited overall inflows, as BlackRock’s Bitcoin ETF has accumulated $28.1 billion in investments so far in 2025, making it the only fund to achieve positive year-to-date (YTD) inflows.
Without BlackRock’s fund, spot Bitcoin ETFs reported a cumulative net outflow of $1.27 billion year-to-date, according to K33’s head of research, Vetle Lunde.
Related: Arthur Hayes calls for $1M Bitcoin as new Japan PM orders economic stimulus
A researcher explained that the dynamics observed in Bitcoin ETF investments suggest that BlackRock’s absence from the altcoin ETF wave might restrict cumulative inflows and their potential positive effect on the underlying tokens.
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