Alts ETF application wave surges, a new round of speculation may begin

Recently, the progress of several alts ETF applications has attracted market attention. Although price performance has not been satisfactory, traditional financial institutions are still actively positioning themselves. Following the confirmation of cryptocurrency ETF applications by several traditional giants by U.S. regulators in February this year, favorable policies and regulatory easing have once again propelled the application process for altcoin ETFs.

Latest Altcoins Applying for ETF

The application process for US ETFs typically takes 6-8 months, including the issuer submitting the application, the exchange submitting documents, public comments, regulatory review, and other stages. Here are several altcoins that have recently applied for ETFs and their recent market performance:

ADA (Cardano)

On February 25, the regulatory agency confirmed that it has accepted the listing application for a spot ADA ETF submitted by a certain exchange on behalf of a certain asset management company. This ETF will be custodied by a certain custodian company, with a certain bank providing asset services and administrative management.

On March 2, a politician mentioned on social media the inclusion of ADA in the cryptocurrency strategic reserves, and on that day, ADA rose by over 70%.

DOT (Polkadot)

On February 25, a certain exchange submitted an application document for a DOT ETF for a certain asset management company.

HBAR (Hedera)

On February 24 and March 4, a certain exchange submitted application documents for HBAR ETFs from two different companies.

Hedera is seen as a dark horse in the cryptocurrency space. The market is anticipating the potential launch of a spot HBAR ETF, with a fund having applied for a physical staking product on a European exchange. At the same time, some companies have submitted applications for a domestic spot HBAR ETF in the United States, and investors are closely watching the regulatory developments after the elections.

AXL (Axelar)

On March 6, a certain company submitted application documents for its AXL ETF.

In addition, a former legal officer of a well-known trading platform has joined Axelar's new advisory board, which is dedicated to regulatory coordination and institutional adoption.

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

APT (Aptos)

On March 6th, a certain asset management company officially submitted the registration application for the Aptos ETF to the regulatory agency.

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

Previously, the company launched the Aptos staking ETF on the Swiss Stock Exchange.

Ethereum ETF Performance

The Ethereum ETF landed on the US capital market on July 23 last year, when the price of Ethereum was around $3200. Data shows that in the half year since its launch, there has been a net inflow of $2.76 billion, equivalent to institutions purchasing nearly 1% of the Ethereum supply. However, the current price of Ethereum has dropped to around $2300.

This is partly due to a certain asset management company continuously selling Ethereum ETFs, becoming the largest seller in the market; on the other hand, Ethereum is more significantly affected by large holders' sell-offs compared to Bitcoin.

It is worth noting that certain political figures and their related entities are continuously increasing their holdings of Ethereum. The net inflow into ETFs and the ongoing purchases by related institutions reflect the confidence of long-term investors in Ethereum in an increasingly open policy environment.

If the above alts ETF is approved in 2025, it will become a channel for traditional capital inflow, but it does not mean that these tokens will necessarily experience a significant increase.

Crypto ETF 2.0 Under the New Government

Looking back at the development of crypto ETFs, it is not difficult to find the significant benefits for the entire market after the new government took office. Analysts point out that before the new government won the election, the approval probability for other assets, except for Litecoin, was below 5%. It is expected that as applications enter the approval process and the regulatory decision deadline approaches, the approval probability for cryptocurrency ETFs will continue to rise.

###'s impact on the crypto market

Analysts expect regulators to make a decision on the proposed alts ETF in October this year. If the alts ETF is approved one after another, the positive effects in the future may continue to attract more conservative and institutional investors, changing the structure of market investors. The crypto market may experience increased liquidity, rising prices, and changes in investor structure under this policy environment. The approval of more ETF products will also bring more funds into the market, enhancing liquidity and thereby reducing price volatility.

In addition, due to regulatory arbitrage, the ETFs launched by the United States may directly trigger imitation from other countries and regions. This imitation could promote the adoption of cryptocurrencies globally to varying degrees, especially in regions with more relaxed regulations, where cryptocurrency adoption will see faster growth. The convergence of policies worldwide can not only effectively reduce the compliance costs of cross-border transactions but also further eliminate investors' concerns about legal risks, encouraging more institutions and individuals to participate. This trend could accelerate the transition of cryptocurrencies from marginal assets to mainstream financial instruments, driving their increasing status in the global economy.

With the new government further supporting the cryptocurrency industry, various states in the U.S. are gradually introducing "strategic Bitcoin reserve" legislation, and Congress may pass cryptocurrency-related bills. Cryptocurrencies are expected to become a new asset class that is neither classified as securities nor commodities, which will have epoch-making significance for the crypto market.

potential ETF applications for alts

As the new government continues to relax cryptocurrency regulations, 2025 may see a peak in alts ETF applications. Institutions predict that the surge in demand for cryptocurrency ETFs will cause its total assets in North America to surpass those of precious metals ETFs, making it the third largest asset class in the rapidly growing $15 trillion ETF industry, following stocks and bonds.

Altcoins that are particularly closely related to the U.S. mainland 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 the first to obtain approval for ETF linked to tokenized government bonds, and may even become a core target for traditional institutions allocating crypto assets. If the relevant legislation is passed within the year, establishing the principle of "decentralized protocol exemption from securities law," U.S. mainstream DeFi tokens such as UNI, MKR, and AAVE may accelerate their integration into the traditional financial system.