Institutional investors may turn to altcoins as the next wave of crypto exchange-traded funds (ETFs) arrives in the U.S., market analysts say.
The U.S. Securities and Exchange Commission (SEC) received at least five new altcoin ETF applications in the first half of October, despite progress stalled by the ongoing U.S. government shutdown.
Leon Wideman, head of research at Web3 analytics firm Onchain, said each approval “could open the door to the next wave of institutional buying.”
“After Bitcoin and Ethereum ETFs prove institutional demand, an influx of altcoin ETFs is the inevitable next step,” Weidman told Cointelegraph. “This is a confidence in regulation that is reflected in the flow of capital.”
Ether ETF exceeds Bitcoin ETF inflows in Q3
According to data aggregator SosoValue, the Spot Ether (ETH) ETF attracted $9.6 billion in inflows in the third quarter of 2025, outpacing the $8.7 billion in inflows from the Spot Bitcoin (BTC) ETF.
This shift signals increased institutional demand for alternative cryptocurrency exposure.
This trend could lead to altcoin ETFs as a new regulatory vehicle to spark the next wave of institutional adoption of altcoins, which could result in sustained inflows for years, Weidman said.
“Financial institutions discovered Bitcoin through ETFs, but are now moving to Ethereum, and other altcoins will come next.”
The industry’s most successful traders, tracked as “smart money” traders on Nansen’s blockchain intelligence platform, are also positioning themselves for approval of altcoin ETFs.
According to Nansen data, the three tokens most held by smart money traders on Thursday were Uniswap (UNI), Aave (AAVE), and Chainlink (LINK).
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However, some analysts are concerned that BlackRock’s withdrawal from altcoin ETFs will limit overall inflows, as BlackRock’s Bitcoin ETF has amassed $28.1 billion in investments by 2025, making it the only fund with positive year-to-date (YTD) inflows.
Without BlackRock’s funds, the Bitcoin Spot ETF would have recorded net outflows of $1.27 billion since the beginning of the year, according to Vettle Runde, head of research at K33.
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Based on the dynamics seen in Bitcoin ETF investing, the researchers explained that BlackRock’s non-participation in the altcoin ETF wave could limit cumulative inflows and potential tailwind effects for the underlying tokens.
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