There are Constant Applications for Altcoin Spot ETFs, Which One Will Be Great Again?
[TL；DR]:
Traditional financial giants such as Franklin Templeton have accelerated their entry, driving a surge in applications for Altcoin ETFs such as Solana, XRP, and DOGE. Currently, spot ETFs for more than 20 Altcoins have entered the SEC review process.
LTC has the highest probability of approval (90%) due to its clear commodity attributes and mature custody solutions, while SOL and XRP are hindered by securities attribute disputes and legal proceedings, with approval probabilities of 70% and 65% respectively.
The SEC’s approval results are expected to be concentrated in October. If the SEC chairman nominated by Trump takes office, the process may be accelerated. In the long run, although compliance will introduce funds, it may impact the inherent anti-censorship properties of the crypto industry.
Introduction
The compliance application of spot ETFs has become an important means for cryptocurrencies to compete for external traffic and funds under the condition of limited on-site narrative and funds. With the successful approval of BTC and ETH spot ETFs in the United States last year, more and more Altcoin ETFs have also stepped up their application process and public relations efforts this year. This article will take you to explore the current competitive status and future prospects of this surge in ETF applications, and analyze the deep logic of this battle for Altcoin ETFs.
A Large Number of Applications for Altcoin ETFs Are Being Filed, and Compliance Endorsement is the Key
On March 12, Franklin Templeton, an asset management giant with a management scale of $1.5 trillion, submitted its first application for XRP spot ETF, becoming the first traditional financial giant to get involved in Altcoin ETF after crypto-native institutions such as Grayscale and Bitwise.
Its head of quantitative investments, Roger Bayston, bluntly stated: “2025 will be the busiest year for ETF legal teams.” We have recently interpreted this incident in the blog post “Ripple (XRP) News: Franklin Templeton Submits ETF Application and SEC Delays Approval.” This statement confirms the reshaping of the value of Altcoins by compliance - through ETF packaging, high-risk crypto assets can put on a regulated cloak to attract institutional funds.
Source: Cointelegraph
In addition to XRP, several other Altcoin ETF applications are currently in progress, involving mainstream currencies such as Solana, DOGE, XRP, LTC, and emerging assets such as Aptos and HBAR. Behind this trend is not only the drive for compliance endorsement but also the reality that funds in this round of bull market flow to ETFs but not overflow.
First, compliance endorsement is the core driving force behind the surge in applications for Altcoin ETFs. As the crypto market matures, the regulatory environment becomes increasingly stringent, and investors’ demand for security and transparency increases. ETFs can provide legitimacy certification for Altcoin projects as a regulated investment tool, attracting more institutional and retail funds.
Secondly, the centralized trend of funds flowing to ETFs in this round of bull market has further promoted the application boom of Altcoin ETFs. Data shows that in 2024, Bitcoin spot ETFs attracted up to $129 billion in capital inflows, providing investors with a convenient Bitcoin investment channel.
According to the latest statistics, from January to February 2025, the net inflow of Bitcoin and Ethereum ETFs accounted for 73% of the total funds in the crypto market, while the market cap of Altcoins fell from 42% in 2024 to 35%. This phenomenon is called “structural liquidity exhaustion” by Block unicorn analyst Bryan Daugherty - institutional investors are more inclined to allocate mainstream assets through ETFs rather than directly participate in high-risk Altcoin speculation.
Source: coinglass
Take Dogecoin as an example. Although its community remains popular, Grayscale’s DOGE Trust Fund’s asset management scale has only grown to $80 million since its establishment in December 2024, far lower than the tens of billions of Bitcoin ETFs in the same period. This “lock-in effect” of funds directly forced Rex Shares to apply for the DOGE ETF, which may release billions of dollars of funds once approved.
Which Top Altcoin ETFs May Be the First to Break Out?
As of the date of writing, more than 20 Altcoin spot ETFs have entered the SEC review process. The following table is a detailed list of several Altcoin ETFs with higher market popularity compiled by the author.
| Coins | Applicant Institutions | Core Advantages | Risk Points | Estimated probability of approval (Bloomberg forecast) | Estimated probability of approval (Polymarket) |
|---|---|---|---|---|---|
| LTC | Canary Capital, Grayscale | SEC classifies it as a Bitcoin fork (commodity), and the custody solution is mature | Limited attractiveness and weak capital spillover effect | 90% | 72% |
| DOGE | Rex Shares, Bitwise | Strong meme culture attributes and high community activity | High price volatility and lack of practical application scenarios | 75% | - |
| SOL | VanEck, Franklin Templeton | Technology generation advantage (Layer1 performance leading), rich ecosystem applications, CME has launched futures products | Potential for large selling pressure, once identified as a security by the SEC | 70% | 26% |
| XRP | Franklin Templeton, Canary | Ripple’s legal dispute is about to be resolved, but institutions still hold more than 30% of the shares | There is a lot of room for policy game and high compliance risks | 65% | 32% |
| APT | Bitwise | Emerging high-performance public chain, low market cap and room for speculation | The circulation rate of tokens is relatively small, and the market is hottest | 50% | - |
Table: Progress and probability forecast of major Altcoin ETF applications (data source: Gate Research compiled from SEC public documents, Bloomberg Intelligence, BlockBeats, Polymarket, etc., data validity as of the date of writing)
Among them, the LTC ETF application submitted by Grayscale and Canary Capital has entered the final review stage of the SEC, which is called “heading to third base” by analysts and has the highest probability of approval:
The commodity attributes are clear: the SEC has determined that LTC is a Bitcoin fork, avoiding the controversy over the qualitative nature of securities;
Mature custody solutions: using regulated institutions such as Coinbase Custody to meet SEC anti-money laundering requirements;
The market is well educated: over 100 million LTC holders and almost no major historical issues have been exposed.
Source: Polymarket
However, the previously popular SOL and XRP have great uncertainty in their approval results this year due to issues such as being classified as securities and long-term legal proceedings.
In addition to the above-mentioned trending high-market-cap Altcoin ETFs, the author has observed that some institutions have applied for ADA, DOT, HBAR, AVAX, APT, SUI, BONK, TRUMP, and other ETFs. This shows the diversity of the sources of Altcoin ETFs, but they are still in the early stages and the probability of approval is lower.
The Approval Result May Be Confirmed in October, and the Market is Looking Forward to A Breakthrough
The current SEC review cycle is typically 240 to 260 days, and decisions on many applications are expected to be concentrated in October, but this still leaves some room for uncertainty.
First, if Trump’s nominee for SEC Chairman Paul Atkins is confirmed by Congress, the approval process may be accelerated.
Furthermore, based on past historical experience, the SEC emphasizes the priority of the futures market in the approval of Bitcoin ETFs, but currently only the SOL futures contract has been added, and the average daily trading volume of Solana futures is relatively light. This low liquidity may become an obstacle to approval.
On the other hand, if Altcoin ETFs are approved one after another this year, the market may show three major trends:
Fund redistribution effect: Institutional funds may spill over from Bitcoin ETF to high-alpha Altcoin ETF. Taking Solana as an example, JPMorgan Chase expects its ETF to bring in $4-8 billion in incremental funds, equivalent to 15%-30% of the current market value.
Source: JP Morgan
Reconstruction of market cycle: The traditional rotation pattern of “Bitcoin leading the rise and Altcoin season following up” may end, and the compliance attributes of ETFs may drive the market from retail-driven to institution-led.
Reassessment of ecosystem value: These Altcoins that pass ETF screening will obtain stronger compliance narrative endorsement, while a large number of tokens that lack application scenarios may accelerate marginalization, and the market polarization phenomenon will become more and more obvious.
The trend of Altcoin spot ETFs is essentially a battle for pricing power between traditional finance and crypto natives. LTC is likely to be the first “game changer” in the short term, but its symbolic significance far exceeds the actual capital inflow. In the long term, although compliance can bring in massive amounts of funds, it also impacts the crypto industry’s values of anti-censorship and permissionlessness. However, no matter the outcome, this trend will inject new vitality and challenges into the crypto market.
