Alts ETF Application Wave: Is a New Round of Market Hype Coming?

Recently, despite the lackluster performance of the cryptocurrency market, traditional financial institutions have shown a high level of interest. Following the approval of ETF applications for LTC, DOGE, SOL, and XRP by the U.S. Securities and Exchange Commission (SEC) for several large U.S. institutions in February this year, favorable policies and regulatory easing have further propelled the frequent advancements of altcoin ETFs this week.

Latest Altcoins Applying for ETF

The application process for U.S. ETFs usually takes 6-8 months, depending on the review progress of the SEC. Below are some of the recent altcoins that have applied for ETFs and their market performance over the past 30 days, sorted by application date:

ADA (Cardano)

On February 25, the SEC confirmed the acceptance of the spot Cardano (ADA) ETF listing application submitted by NYSE Arca on behalf of Grayscale. The application was submitted on February 10, with Coinbase Custody Trust Company acting as the custodian and BNY Mellon responsible for asset services and administrative management.

On March 2nd, ADA's increase exceeded 70% that day.

DOT (Polkadot)

On February 25, Nasdaq submitted a 19b-4 application for a DOT ETF for a certain asset management company.

HBAR (Hedera)

On February 24, Nasdaq submitted a 19b-4 application for a Canadian investment company's HBAR ETF; on March 4, it submitted another 19b-4 application for a Hedera ETF from another asset management company.

Hedera is regarded as a dark horse in the cryptocurrency space. The market is anticipating the potential launch of a spot HBAR ETF, and a certain fund company has submitted an application for a physically backed product to a European exchange. At the same time, another company has submitted an application for a domestic spot HBAR ETF in the United States, further increasing market expectations.

AXL (Axelar)

On March 6, a certain company submitted an S-1 application for its AXL ETF.

In addition, a former legal chief of a well-known exchange has joined Axelar's new advisory board, which focuses on regulatory coordination and institutional adoption.

The AXL Trust Fund launched by a certain capital company will provide institutional investors with investment opportunities in blockchain interconnectivity technology, connecting multiple Web3 ecosystems.

APT (Aptos)

On March 6, a certain asset management company officially submitted an S-1 application to the SEC to register for a potential Aptos ETF.

Aptos is seeking to launch a US-listed ETF in collaboration with major asset management companies, making it one of the few crypto protocols to achieve this milestone globally.

Previously, the asset management company launched the Aptos Staking ETP on the Swiss Stock Exchange in November 2024.

How is the Ethereum ETF performing?

The Ethereum ETF was launched on July 23 last year in the U.S. capital market, when the price of Ethereum was around $3200. Data shows that in the six months since its launch, net inflows reached $2.76 billion, equivalent to nearly 1% of Ethereum being purchased by Wall Street. However, the current price of Ethereum has fallen to around $2300.

This is partly because a certain asset management company keeps selling Ethereum ETFs, becoming the largest seller in the market; on the other hand, Ethereum is more severely affected by large holders' sell-offs than Bitcoin.

But the good news is that a certain politically-related entity is continuously increasing its holdings of Ethereum. The net inflow of ETFs and the continued purchases by these institutions reflect the confidence of long-term investors in Ethereum in an increasingly open policy environment.

However, even if the aforementioned alts ETF is approved in 2025, although it will become a window for traditional capital inflow, it does not mean that these tokens will necessarily rise significantly.

Crypto ETF 2.0 Era

Looking at the development history of crypto ETFs, it is not difficult to see the significant benefits of this year's policy changes for the entire market. Analysts point out that before the political changes, the approval probability for all assets other than Litecoin was below 5%. It is expected that as applications enter the approval process and the SEC's decision deadline approaches, the approval probability of cryptocurrency ETFs will continue to rise.

###'s impact on the crypto market

Analysts expect the SEC to make a decision on the proposed altcoin ETF in October this year. If the altcoin ETF is consecutively approved, various positive factors may continue to attract more conservative and institutional investors, changing the structure of market investors. The crypto market may experience increased liquidity, price rises, and changes in the investor structure under this policy environment.

In addition, the ETF launched by the United States may lead other countries and regions to follow suit, promoting the popularization of cryptocurrency globally. The convergence of global policies can not only reduce compliance costs for cross-border transactions but also eliminate investors' concerns about legal risks, encouraging more institutions and individuals to participate. This trend could accelerate the transition of cryptocurrency from a fringe asset to a mainstream financial instrument.

With policy support for the crypto industry, various states in the United States are gradually introducing legislation for cryptocurrency reserves, and Congress may have the opportunity to pass relevant bills. Once the legislation is passed, cryptocurrencies may become a new asset class that is neither classified as securities nor as commodities, which would have epoch-making significance for the crypto market.

alts that may apply for an ETF in the future

The year 2025 may see a peak in applications for alts ETFs. Institutions predict that the surge in demand for cryptocurrency ETFs will cause their total assets in North America to surpass those of precious metals ETFs, making them the third largest asset class after stocks and bonds.

U.S.-based alts are more likely to be favored. For example, ONDO, as a representative of the RWA track that anchors real assets like U.S. Treasury bonds, may be among the first to obtain ETF approval for tokenized government bonds. If the relevant legislation passes and establishes the principle of "decentralized protocol exemption from securities laws," mainstream U.S. DeFi tokens like UNI, MKR, and AAVE may accelerate their integration into the traditional financial system.