Spot Bitcoin (BTC ($88,275.39)) and Ethereum (ETH ($2,455.40)) ETFs, seen as a turning point for the cryptocurrency industry in 2024, have been approved.
This approval enabled ETF applications for altcoins such as XRP ($2.27), Solana (SOL ($137.98)), Litecoin (LTC ($124.70)), Dogecoin (DOGE ($0.21)), and Cardano (ADA ($0.68)).
As the cryptocurrency community eagerly awaits the green light for altcoin ETFs, top analysts expect them to be most likely approved. However, one analyst said that altcoin ETFs will not live up to expectations.
Katalin Tischhauser, Head of Research at Sygnum Bank, stated that altcoin ETF approvals are inevitable, but they may not attract much interest among investors and will not meet expectations.
“There are many altcoin ETF applications, but initial demand for altcoin ETFs will be weaker than demand for major cryptocurrencies like Bitcoin and Ethereum.
It is almost certain that altcoin ETFs will be approved in the market, but no one can show where the demand will come from.
At this point, even if altcoin ETFs are approved, they will initially see limited demand from retail investors. Many investors are likely already holding altcoins directly, which limits interest in ETFs.
Tischhauser noted that he estimated cumulative inflows into altcoin ETFs to be between $100 million and $1 billion.
Morningstar manager Bryan Armour also stated that the interest in altcoin ETFs will be much less than Bitcoin and Ethereum, saying, “For Bitcoin, some institutional investors and advisors have been waiting for an ETF to access it. However, I do not expect the number of investors waiting for ETFs before investing in altcoins to be this large. Because if institutional investors had a strong interest in Solana or Dogecoin, they would have bought it by now.”
However, JPMorgan had estimated that cumulative demand for altcoin ETFs would exceed $14 billion.
*This is not investment advice.
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