Institutional investors are poised to shift their focus to altcoins, anticipating the arrival of a new generation of cryptocurrency exchange-traded funds (ETFs) in the United States. This potential influx of capital follows the growing interest in regulated crypto investment vehicles.
The US Securities and Exchange Commission (SEC) has seen at least five new altcoin ETF filings submitted during the first half of October. This activity occurred even as a US government shutdown created delays in regulatory processes.
According to Leon Waidmann, head of research at Web3 analytics firm Onchain, each ETF approval could "open the door for the next wave of institutional buying."
Waidmann explained to Cointelegraph, "Altcoin ETF inflows are the inevitable next step after Bitcoin and Ethereum ETFs proved institutional demand. This is regulatory confidence translating into capital flows."
Ether ETFs Outperform Bitcoin ETF Inflows in Q3
Spot Ether (ETH) ETFs have attracted significant attention, generating $9.6 billion in inflows during the third quarter of 2025. This figure surpasses the $8.7 billion generated by spot Bitcoin (BTC) ETF inflows during the same period, according to data from aggregator SosoValue.
This notable shift indicates a rising institutional demand for alternative cryptocurrency exposure beyond Bitcoin.
Waidmann suggests that altcoin ETFs could catalyze the next phase of institutional altcoin adoption. He believes these new regulated vehicles will lead to years of sustained inflows, mirroring the trajectory seen with Bitcoin and Ethereum ETFs.
“Institutions found Bitcoin via ETFs, now they’re moving into Ethereum, and other altcoins are coming next.”
"Smart Money" Positions for Altcoin ETF Approvals
The most successful traders in the industry, identified as "smart money" traders on Nansen’s blockchain intelligence platform, are actively positioning themselves in anticipation of altcoin ETF approvals.
Data from Nansen shows that Uniswap (UNI), Aave (AAVE), and Chainlink (LINK) were the three most held tokens by smart money traders as of Thursday.
However, some analysts express concern that the absence of BlackRock from the altcoin ETF filings might limit overall inflows. BlackRock's Bitcoin ETF has been a dominant force, amassing $28.1 billion in investments so far in 2025, and is the only fund to record positive year-to-date (YTD) inflows.
Without BlackRock's participation, spot Bitcoin ETFs have experienced a cumulative net outflow of $1.27 billion year-to-date, according to Vetle Lunde, head of research at K33.
Lunde explained that based on the investment dynamics observed in Bitcoin ETFs, BlackRock's omission from the altcoin ETF wave could potentially curb cumulative inflows and their positive impact on the underlying tokens.