Institutional investors might shift their focus to altcoins with the arrival of a new series of cryptocurrency exchange-traded funds (ETFs) in the United States, as noted by market analysts.
The US Securities and Exchange Commission (SEC) has received at least five new altcoin ETF applications in the first half of October, despite the ongoing US government shutdown hindering progress.
Approval of these ETFs could “pave the way for the next wave of institutional purchases,” said Leon Waidmann, head of research at Web3 analytics company Onchain.
“Altcoin ETF investments are the natural progression following the institutional interest shown in Bitcoin and Ethereum ETFs,” Waidmann told Cointelegraph. “This reflects regulatory confidence manifesting into capital inflows.”
Ether ETFs outpace Bitcoin ETF investments in Q3
Spot Ether (ETH) ETFs saw $9.6 billion in inflows during Q3 2025, exceeding the $8.7 billion attracted by spot Bitcoin (BTC) ETF inflows, according to data aggregator SosoValue.
This transition indicates a growing institutional appetite for alternative crypto investments.
The emergence of altcoin ETFs could drive the next phase of institutional altcoin acceptance as new regulated products, potentially leading to years of ongoing inflows, Waidmann stated.
“Institutions have discovered Bitcoin via ETFs, they are now transitioning into Ethereum, and other altcoins are next.”
The industry’s top traders, referred to as “smart money” traders on Nansen’s blockchain intelligence platform, are also preparing for the anticipated approval of altcoin ETFs.
The Uniswap (UNI), Aave (AAVE), and Chainlink (LINK) were the three most held tokens by smart money traders on Thursday, according to data from Nansen.
Related: Crypto treasuries siphon $800B from altcoins, and it might be ‘forever’
Nonetheless, some analysts express concern that the absence of BlackRock from the altcoin ETF space may 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 with positive year-to-date (YTD) inflows.
In the absence of BlackRock’s fund, spot Bitcoin ETFs have seen 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
Based on the observed trends in Bitcoin ETF investments, the lack of BlackRock in the altcoin ETF wave could restrict overall inflows and diminish their potential positive impact on the underlying tokens, the researcher noted.
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