By Frances Yue
How minor crypto cash like Solana, XRP, Dogecoin and even Trump’s personal meme coin might be part of the main leagues
Welcome again to Distributed Ledger. That is Frances Yue, crypto reporter at MarketWatch.
Since President Donald Trump’s election win in November, a number of asset managers have filed functions with regulators for a quantity of exchange-traded funds with plans to spend money on minor crypto cash.
These “altcoins” might embody solana (SOLUSD), XRP (XRPUSD), dogecoin (DOGEUSD) and even Trump’s personal meme coin (TRUMPUSD), which was launched proper earlier than his inauguration in January. (Altcoins refer to any crypto with a smaller market capitalization than bitcoin.)
Learn: Smaller cryptos might acquire greater than bitcoin underneath Trump – must you make investments?
The U.S. Securities and Trade Fee to this point has solely authorized ETFs that straight spend money on bitcoin (BTCUSD) and ether (ETHUSD), respectively.
Digital-asset merchants have been hoping that underneath Trump’s second time period, the SEC – which has already established a crypto process drive led by Commissioner Hester Peirce – will approve a number of altcoin ETFs, which might drive up costs for these cash.
Nonetheless, with expectations for altcoin ETF approvals working excessive, buyers might surprise if potential positive aspects already have been priced into the market.
I caught up with Shubh Varma, co-founder and chief government at crypto analysis and buying and selling platform Hyblock Capital, and Eric Rose, head of digital-asset execution at StoneX Digital, to speak about the potential demand for altcoin ETFs in the months forward.
Discover Frances Yue on X to share your ideas on altcoin ETFs.
What is predicted?
Traders have been broadly anticipating a extra crypto-friendly SEC to approve functions for the solana and XRP ETFs. On cryptocurrency-based prediction market Polymarket, merchants have been pricing in a 83% likelihood that the SEC will approve the solana ETFs in 2025, and a 80% likelihood that the regulator will greenlight the XRP ETFs this 12 months.
A spokesperson at the SEC declined to remark.
Nonetheless, folks have solely priced the favorable odds that some of the ETFs might get authorized – not the quantity of capital inflows that these ETFs might see, famous Hyblock’s Varma.
Whereas the approval of bitcoin ETFs in January 2024 was broadly anticipated, these new funds noticed important inflows after they began buying and selling, which additional drove up bitcoin’s worth, Varma mentioned.
Nonetheless, it stays a query how a lot demand altcoin ETFs would see in the event that they have been launched.
For instance, ether ETFs, which began buying and selling in July of final 12 months, have seen significantly much less inflows than their bitcoin counterparts. Bitcoin is by far the world’s largest cryptocurrency by market capitalization.
Ether ETFs, which have been buying and selling for 135 days as of Tuesday, have seen about $2.8 billion in cumulative internet inflows to this point, in accordance to Dow Jones Market Knowledge. That was dwarfed by the cumulative internet inflows of $17.5 billion seen by bitcoin ETFs of their first 135 days of buying and selling.
Ether’s market cap stands at round $333 billion, roughly 17.3% of bitcoin’s market cap of $1.9 trillion. XRP and solana’s market caps are even smaller, standing at round $139.7 billion and $96.8 billion, respectively.
The important thing query lies in whether or not the ETFs investing in XRP, solana and different smaller cryptos would generate sufficient curiosity from non-crypto-native buyers, mentioned StoneX’s Rose.
Traders can now purchase solana and XRP on main crypto exchanges corresponding to Coinbase (COIN), however “you even have this entire funding neighborhood that does not have an understanding or the comfortability to arrange a crypto-specific account,” Rose mentioned in a cellphone interview.
If that wider neighborhood chooses to spend money on smaller cryptocurrencies by conventional brokerage accounts, it might drive inflows into altcoin ETFs and push up these cryptos’ costs, Rose added.
Crypto in a snap
Bitcoin (BTCUSD) declined 7.1% over the previous seven days, to commerce at round $97,420 on Wednesday morning. Ether (ETHUSD) misplaced round 11.3% over the previous seven days, to round $2,785, in accordance to Dow Jones Market Knowledge.
Should-reads
— S.E.C. Strikes to Scale Again Its Crypto Enforcement Efforts (The New York Occasions)
— Banks Need to Crash the Bitcoin Social gathering. Trump Is Opening the Door. (Barron’s)
— Crypto followers thought this is able to be ether’s huge 12 months. Then got here the tariffs. (MarketWatch)
— MicroStrategy raised one other $600 million from most well-liked inventory gross sales to purchase bitcoin (MarketWatch)
— Heavyweight hedge fund Elliott says Trump administration driving a crypto frenzy (MarketWatch)
-Frances Yue
This content material was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is printed independently from Dow Jones Newswires and The Wall Road Journal.
(END) Dow Jones Newswires
02-05-25 1839ET
Copyright (c) 2025 Dow Jones & Firm, Inc.
