Original Title: "The Listing Situation of Four Major Altcoin ETFs: A Total Inflow of $700 Million, Easy to Issue but Hard to Attract Capital"
Original Author: Nancy, PANews
With the U.S. SEC opening a fast track for crypto ETFs and the regulatory environment becoming increasingly clear, more and more altcoins are attempting to step onto the Wall Street stage. Since last month, eight altcoin ETFs have been approved one after another, but under the overall downward trend of the crypto market, these products generally face limited capital inflow after listing, making it difficult to significantly boost coin prices in the short term.
Four Major Altcoins Land on Wall Street, Short-term Capital Attraction Remains Limited
Currently, four crypto projects—Solana, Ripple, Litecoin, and Hedera—have received "entry tickets" to Wall Street. However, from the perspective of capital flow, the overall attractiveness remains limited, and some ETFs have experienced several days of zero inflow. These four types of ETFs have only received a cumulative net inflow of about $700 million. Moreover, after the ETFs were launched, the prices of the respective coins generally declined, which is also influenced to some extent by the overall correction in the crypto market.
• Solana
Currently, there are five U.S. Solana spot ETFs on the market, issued by Bitwise, VanEck, Fidelity, Grayscale, and Canary, with related products from 21Shares and CoinShares also in the pipeline.
According to SoSoValue data, the cumulative total net inflow of U.S. Solana spot ETFs is approximately $420 million, with a total net asset value of $594 million. Among them, Bitwise's BSOL contributed the majority of the trading volume, with a cumulative inflow of $388 million over three consecutive weeks, but most of this came from an initial investment of nearly $230 million on the first day, after which the inflow significantly slowed; Fidelity's FSOL had a net inflow of only $2.07 million on its listing day, with a total net asset value of $5.38 million; Grayscale's GSOL had a cumulative net inflow of about $28.45 million, with a total net asset value of $99.97 million; Canary's SOLC had no net inflow on its listing day, with a total net asset value of $820,000. It is worth noting that all spot ETF issuers support staking functions, which may provide some support for market demand.
CoinGecko data shows that since the first Solana spot ETF was launched on October 28, the price of SOL has fallen by 31.34% to date.
• XRP
In terms of U.S. XRP spot ETFs, the only listed product is XRPC launched by Canary, while related products from CoinShares, WisdomTree, Bitwise, and 21Shares are still in preparation.
According to SoSoValue data, since its launch, XRPC has had a cumulative net inflow of over $270 million. The trading volume on the first day reached $59.22 million, but it did not generate a net inflow; the next day, a net inflow of $243 million was achieved through cash or physical subscriptions, with a trading volume of $26.72 million.
CoinGecko data shows that since the first Ripple spot ETF was listed on November 13, the price of XRP has decreased by about 12.71% to date.
• LTC
At the end of October this year, Canary Capital officially launched the first U.S. ETF tracking Litecoin, LTCC. Related products from CoinShares and Grayscale are still in preparation and are expected to follow suit.
According to SoSoValue data, as of November 18, LTCC has had a cumulative net inflow of about $7.26 million. Daily net inflows are generally only in the hundreds of thousands of dollars, with several days of zero inflow.
CoinGecko data shows that since the first Litecoin spot ETF was launched on October 28, the price of LTC has fallen by about 7.4% to date.
• HBAR
The first U.S. ETF tracking HBAR, HBR, was also launched by Canary Capital at the end of last month. SoSoValue data shows that as of November 18, HBR has had a cumulative net inflow of about $74.71 million. Notably, nearly 60% of the funds were concentrated in the first week, after which the net inflow significantly decreased, with several consecutive days of zero inflow.
CoinGecko data shows that since the first Hedera spot ETF was launched on October 28, the price of HBAR has decreased by about 25.84% to date.
In addition to the above projects, the spot ETFs for crypto assets such as DOGE, ADA, INJ, AVAX, BONK, and LINK are still in progress, with Bloomberg analyst Eric Balchunas expecting Grayscale's Dogecoin ETF to be launched on November 24.
The Expansion Phase of Crypto ETFs Has Begun, but Listing Performance Faces Multiple Challenges
According to incomplete statistics from Bloomberg, there are currently 155 ETPs (exchange-traded products) applied for in the crypto market, covering 35 types of digital assets, including Bitcoin, Ethereum, Solana, XRP, and LTC, showing a land-grab growth pattern. With the end of the U.S. government shutdown, the approval process for these ETFs is expected to accelerate.
As the U.S. regulatory environment gradually clarifies, it may drive a new round of expansion in crypto ETF applications. The U.S. SEC has approved a general listing standard for crypto ETFs and recently released new guidelines allowing crypto ETF issuers to expedite the effectiveness of their filing documents. Additionally, the U.S. SEC has significantly removed the previously routine special chapter on cryptocurrencies from its latest fiscal year review focus document. This contrasts with the period under former Chairman Gary Gensler, when cryptocurrencies were explicitly listed as a review focus, particularly naming spot Bitcoin and Ethereum ETFs.
Moreover, the introduction of staking functions is believed to stimulate institutional investor demand, thereby attracting more issuers to join the ETF application queue. Research from Swiss crypto bank Sygnum shows that despite the recent significant market correction, institutional investors' confidence in crypto assets remains strong. Over 80% of institutions expressed interest in crypto ETFs beyond Bitcoin and Ethereum, with 70% stating that they would start or increase investments if the ETFs could provide staking yields. Furthermore, there have been positive signals at the policy level regarding ETF staking, with U.S. Treasury Secretary Scott Bessent recently stating that he would work with the IRS to update guidance to provide regulatory support for crypto ETPs that include staking functions. This move is seen as potentially accelerating the approval timeline for Ethereum staking ETPs while paving the way for multi-chain staking products for networks like Solana, Avalanche, and Cosmos.
However, the current lack of capital attraction for altcoin ETFs is mainly influenced by multiple factors such as market size, liquidity, volatility, and market sentiment.
On one hand, the market size and liquidity of altcoins are limited. CoinGecko data shows that as of November 18, Bitcoin's market share is close to 60%, and excluding ETH and stablecoins, other altcoins only account for 19.88% of the market. This results in poor liquidity for the underlying assets of altcoin ETFs. Additionally, compared to Bitcoin and Ethereum, altcoins are more susceptible to short-term narratives and exhibit higher volatility, being viewed as high-risk Beta assets. According to Glassnode data, since the beginning of this year, the relative profit realization of altcoins has mostly fallen into a deep surrender zone, showing a significant divergence between Bitcoin and altcoins that is rarely seen in previous cycles. Therefore, altcoin ETFs find it difficult to attract large-scale investments, especially single-token ETFs. In the future, investors may prefer to adopt a diversified, decentralized bundle of altcoin ETF strategies to reduce risk and enhance potential returns.
On the other hand, altcoins face risks of market manipulation and transparency. Many altcoins have insufficient liquidity, making them prone to price manipulation. The net asset value of ETFs relies on the prices of the underlying assets, and if the prices of altcoins are manipulated, it will directly affect the value of the ETFs, potentially leading to legal risks or regulatory investigations. Additionally, some altcoins may be classified as unregistered securities, as the U.S. SEC is currently promoting a token classification plan to distinguish whether cryptocurrencies fall under the category of securities.
Furthermore, the uncertainty of the macroeconomic environment has exacerbated investors' risk-averse sentiment. In an overall low-confidence environment, investors are more inclined to allocate to traditional assets such as U.S. stocks and gold. At the same time, altcoin ETFs lack the recognition and market acceptance that Bitcoin or Ethereum spot ETFs enjoy, especially lacking endorsements from large institutions like BlackRock. The distribution networks, brand effects, and market trust brought by leading issuers are difficult to replicate, further weakening the attractiveness of altcoin ETFs in the current environment.
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