As the next wave of cryptocurrency exchange-traded funds (ETFs) takes shape, analysts predict institutional investors will soon expand beyond Bitcoin and Ethereum into regulated altcoin markets.
Institutional Demand Shifts Toward Altcoins
After the success of Bitcoin and Ether ETFs, several U.S. asset managers have now filed for altcoin-based ETFs, signaling what experts describe as the beginning of a broader institutional adoption cycle.
According to Leon Waidmann, head of research at Onchain, the progression is a natural evolution of the crypto investment landscape.
“Altcoin ETF inflows are the inevitable next step after Bitcoin and Ethereum ETFs proved institutional demand,” Waidmann said. “This is regulatory confidence translating into capital flows.”
At least five new altcoin ETF applications were submitted to the U.S. Securities and Exchange Commission (SEC) in October, even amid a partial government shutdown delaying approvals.
Ether ETF Inflows Surpass Bitcoin in Q3
Fresh data from SosoValue reveals that spot Ether ETFs attracted $9.6 billion in inflows during the third quarter of 2025 — overtaking the $8.7 billion seen by spot Bitcoin ETFs over the same period.
This marks the first time Ethereum has outpaced Bitcoin in quarterly ETF inflows, a sign that institutional investors are increasingly seeking diversified exposure to crypto assets beyond BTC.
“Institutions found Bitcoin via ETFs. Now they’re moving into Ethereum — and other altcoins are coming next,” Waidmann added.
‘Smart Money’ Positions Ahead of ETF Approvals
Data from Nansen’s blockchain intelligence platform shows that professional crypto traders — often referred to as “smart money” — are already preparing for the next ETF cycle. The most held altcoins among these investors include Uniswap (UNI), Aave (AAVE), and Chainlink (LINK), all of which are expected to benefit from potential ETF inflows.
Waidmann noted that this shift is likely to create a “multi-year inflow pipeline” for altcoins once approvals begin, mirroring the surge seen in Bitcoin ETFs earlier this year.
However, some experts believe the impact could be limited without the participation of BlackRock, whose Bitcoin ETF has attracted $28.1 billion in 2025, accounting for the majority of positive ETF inflows.
According to Vetle Lunde, head of research at K33, “BlackRock’s absence may restrict cumulative inflows and dampen the tailwind effect on underlying altcoins.”
Still, analysts agree that ETF approvals for major altcoins will mark a turning point — establishing a bridge for institutional capital to enter the broader crypto ecosystem.
If Bitcoin ETFs brought Wall Street to crypto, altcoin ETFs could bring Wall Street to Web3.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.