Altcoin Rally Hinges on ETF Approvals, Grayscale Files AVAX ETF
Analysts at Bitfinex warn that a full-scale altcoin rally may stall without approval of new crypto ETFs beyond Bitcoin and Ethereum. They argue that broad-based ETF approvals are critical to sustain demand and stable inflows across altcoins. The current market shows cautious capital flows into spot Bitcoin and Ethereum ETFs, lacking the ‘rising tide’ effect needed for altcoins, and delaying any altcoin rally. However, David Duong, global head of research at Coinbase Institutional, predicts an altseason by September, citing a 4.5% drop in Bitcoin dominance and possible rotation into higher-risk tokens. Meanwhile, the US SEC has delayed decisions on multiple proposed ETFs covering Solana, XRP and combined Bitcoin-Ethereum products. In response, issuers are racing to secure ETF approvals for altcoin products. Grayscale Investments filed an S-1 to convert its Avalanche Trust into a spot AVAX ETF, with Coinbase Custody and BNY Mellon announced as service providers. VanEck has also filed for its own spot Avalanche ETF. Despite AVAX’s 55% plunge from its December 2024 peak to around $23, the network shows renewed activity, with SkyBridge Capital’s $300 million tokenization project and Wyoming’s Frontier Stable Token support. Traders now await ETF approvals as the key catalyst for any sustainable altcoin rally.
Neutral
Bitfinex analysts’ view that an altcoin rally hinges on ETF approvals underscores limited near-term catalysts for alt tokens. Historically, spot Bitcoin and Ethereum ETF launches in the US generated inflows that lifted broader crypto sentiment, but altcoins lagged until dedicated altcoin ETFs arrived. The SEC’s delays on Solana, XRP and mixed Bitcoin-Ethereum products suggest continued market caution. However, Grayscale’s AVAX ETF filing and VanEck’s concurrent application demonstrate growing institutional appetite. Traders may maintain positions but refrain from aggressive altcoin buying until ETFs clear regulatory hurdles. This balanced development implies a neutral market impact: strong long-term bullish drivers in place, but a short-term waiting period that tempers volatility.