Do Crypto ETFs Hold the Key to Altcoin Season?
Bitcoin dominance in the crypto market has dropped 6% in the last 30 days to 58.58%, and people in the crypto market are looking forward to
Quick overview
- Bitcoin dominance has decreased by 6% to 58.58%, prompting anticipation for an altcoin season.
- The Altcoin Season Index is currently at 46, indicating a cautious market awaiting regulatory clarity and new ETF products.
- Bitfinex analysts suggest that a significant rise in altcoins may not occur until more diverse crypto ETFs are available.
- Canary Capital Group has filed for a new ETF that will track U.S.-made cryptocurrencies, reflecting ongoing changes in U.S. crypto legislation.
Bitcoin dominance in the crypto market has dropped 6% in the last 30 days to 58.58%, and people in the crypto market are looking forward to altcoin season. With the Altcoin Season Index currently reading 46 out of 100, the crypto market finds itself at a crossroads. While Bitcoin BTC/USD recently hit an all-time high of $124,450 on August 14 before retreating 11.8% to around $109,144, the broader altcoin market awaits the regulatory clarity and institutional infrastructure that new ETF products could provide.
Bitfinex’s latest research, on the other hand, says that the long-awaited broad rise in alternative cryptocurrencies might not happen until more varied crypto ETFs are available on the market.
Crypto ETF Expansion Key to Altcoin Rally
Bitfinex analysts say that a real “rising tide lifts all boats” situation won’t happen until later this year, when new ways to invest in altcoins are made available and Bitcoin products start to gain traction again. These new ETF offerings are expected to “create the conditions for a broader re-rating across the digital asset complex” by “generating sustained, price-agnostic demand.”
According to researchers, the current crypto market has a “muted trajectory” and “softer appetite for risk at this stage of the cycle.” While capital inflows are still good, the cautious attitude of investors is very different from the frenzied demand that drove past all-time high rises.
David Duong, Coinbase Institutional’s global head of research, recently said that “current market conditions now suggest a potential shift toward a full-scale altcoin season as we approach September.” This is different from this view.
SEC Delays Continue Amid Growing Altcoin ETF Applications
The crypto ETF market is still changing because the Securities and Exchange Commission is putting off judgments on a number of high-profile applications. The Truth Social Bitcoin-Ethereum ETF, the 21Shares and Bitwise Solana products, and the 21Shares Core XRP Trust have all been delayed. The choices will now be made in October.
Even if these delays have happened, people are still guessing which crypto ETFs will come out next. Since their launch in January 2024, spot Bitcoin ETFs have been trading for more than 19 months. Since their launch in July 2024, spot Ether ETFs have been available for almost 13 months.
Eric Balchunas, an analyst with Bloomberg ETFs, recently said that there is a “really good chance” that actively traded memecoin ETFs would ultimately appear. He also said that there will be a “slew of active crypto ETFs” followed by active memecoin-only funds that are likely to come out in 2026.
American-Made Crypto ETF Emerges
Canary Capital Group has filed for the Canary American-Made Crypto ETF (MRCA), which would track cryptocurrencies that were made, mined, or mostly run in the United States. This is another new idea for an ETF. The fund would have things like XRP, Solana, Dogecoin, Cardano, Chainlink, and Stellar, but not stablecoins, memecoins, or pegged currencies.
This filing comes after Canary’s recent proposal for a Trump Coin ETF and during a larger change in US cryptocurrency legislation. For example, the SEC’s August staff statement made it clear that some liquid staking arrangements don’t fall under securities laws.
Do Altcoins Serve as Bitcoin’s Testing Ground?
Tim Draper, a venture capitalist at Draper Associates, has a different view on the role of altcoins in the ecosystem. He says they act as “beta testers” that make Bitcoin stronger in the long run. In a recent interview with CNBC, Draper said that Bitcoin’s market share has grown from 40% during its first boom to about 61–62% now. He compared this to how Microsoft was the most important company in the early days of computing.
Draper said, “All of these smaller cryptocurrencies are trying new things and doing cool things, and all of the great engineers are porting those to Bitcoin.” He called this a “gravitational pull toward Bitcoin.”
Electric Capital’s developer statistics, on the other hand, shows a different picture. It says that only 2,583 people are working on Bitcoin, while 12,931 are working on the EVM stack and 9,094 are working on Ethereum.
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