- Analyst James Seyffart sheds light over Bitcoin and Ethereum ETFs that are in high demand.
- Solana and XRP ETFs attract attention, but inflows won’t match BTC and ETH.
- Basket ETFs could boost adoption, however SEC’s stay order holds up their launch.
As crypto markets head into the fall with momentum, one question looms large: Will altcoin ETFs trigger a new wave of adoption in 2024-2025? Bloomberg ETF analyst James Seyffart believes the answer could reshape the industry.
Bitcoin and Ethereum ETFs Set the Stage
Bitcoin spot ETFs have already pulled in tens of billions since their approval, while Ethereum ETFs have accelerated, with inflows topping $14 billion. Notably, $10 billion of that arrived in just the past quarter. With this, the attention had shifted from the giants to altcoins.
“Ethereum ETFs surprised even the skeptics,” Seyffart said on Milkroad podcast, adding that hedge funds and investment advisors dominate institutional filings, while retail demand makes up a large, less-visible share.
With focus moved to other altcoins like Solana and XRP, the discussion opened new insights on the assets. Products offering staking, such as Solana’s ETF, have already attracted interest, while leveraged XRP futures ETFs have outpaced expectations. Seyffart warns, however, that investors should not expect the same scale of inflows seen with Bitcoin or Ethereum:
Why Basket ETFs Could Be the Real Breakthrough
Seyffart stated that the longer-tail assets would have demand and that there will be multiple products, but not every single one will thrive. The real growth, he argues, could come from basket products, funds that group multiple digital assets under one ETF.
“Even if it’s 70% Bitcoin, 20% Ethereum, and 10% everything else, that’s a product advisers can easily fit into a portfolio,” he said. Both Bitwise and Grayscale received approval to list their basket products, but the SEC quickly issued a stay order, halting its progress.
Is Altcoin Season Coming?
On the market side, the move could require several macro factors to drive the next big move, which include U.S. interest rate cuts, clearer regulatory frameworks, and the potential for 401(k) retirement funds to flow into digital assets by 2026.
At the same time, Bitcoin dominance is shifting and the Altcoin Season Index has climbed sharply from 20 in May to 60 now. If trends hold, experts have said that a true altcoin season could arrive between late September and early October.
Related: Is Altcoin Season Here? Bitcoin Dominance Drops as Institutional Futures Volume Hits Record High
Analyst Issues A Warning
However, Seyffart warned that investors should not expect altcoins to surge the same way they did in previous cycles. Today, much of the money powering Bitcoin and Ethereum rallies is institutional capital, and large institutions are unlikely to rotate into smaller, riskier tokens.
“The market is becoming more institutionalized, with smarter players entering. That doesn’t mean altcoins won’t benefit, but it does mean the days of every meme coin and random layer-1 project pumping together are likely behind us,” Seyffart said.
On the whole, it is not clear whether altcoin ETFs would replace Bitcoin and Ethereum, but they have garnered investor attention, which could bring a prominent change in the broader crypto industry.
Related: Could a Quantum Computer Break Bitcoin? The SEC has Now Taken the Threat Seriously
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
