Key Takeaways
Will the Adoption of Altcoin ETFs Cause an Alt Season?
Sub-$100 billion liquidity and BTC dominance near 60% still limit upside, but an ETH-led recovery could change that.
What do analysts think of the massive altcoin ETFs under review?
Over 150 ETF filings led by Solana show that TradFi favors diversified exposure to crypto indices over individual tokens.
The altcoin rush seems to be increasing. According to Bloomberg ETF analyst Eric Balchunas, there are 155 crypto ETPs awaiting applications to track 35 different digital assets, mostly dominated by Solana [SOL].
Solana filings awaiting the SEC’s decision were 23, Ripple [XRP] and new Ethereum [ETH] applications were 20 and 10 respectively. Diversified or basket index that tracks multiple crypto assets saw significant interest from 10 issuers.
Balchunas added that this could be just the beginning of the crypto rush.
“We could easily see more than 200 hit the market in the next 12 months. Total land rush.”
The highly anticipated applications such as Spot SOL and XRP ETFs were expected to be signed in October. But the ongoing US government shutdown has disrupted the timeline.
Will SEC cause an altcoin season?
However, Nate Geraci of ETF Store says doubted that TradFi will jump over all those altcoins. Instead, he predicted they could opt for indexes that track a basket of crypto assets.
“Trafi investors are absolutely unwilling to navigate all these individual tokens. They are going to take a diversified, shotgun approach to an emerging asset class.”
That said, the recent altcoin sell-off subsided, as evidenced by the easing of the Altcoins Exchange Inflow.
Easing of inflows, shrinking liquidity
Source: CryptoQuant
While this could increase the chances of a broader altcoin market recovery, liquidity has fallen significantly since mid-October.
Stablecoin’s Exchange Inflow, which tracks the ecosystem’s liquidity, fell below $100 billion for the first time since July. In the past, liquidity declines have coincided Bitcoin [BTC] price consolidation or pullbacks that also weighed on the altcoins.
For example, in the first quarter of 2025, liquidity fell by half from over $160 billion to less than $80 billion. The BTC price fell by 30% from $109,000 to $70,000.
Source: CryptoQuant
Interestingly, the liquidity environment improved in the second quarter and BTC also recovered to over $126,000, boosting a number of altcoins such as Hyperfluid [HYPE] with it.
BTC’s dominance indicates a mixed setup
Another altcoin seasonal tracker, BTC dominance, remained below 60% at the time of writing, suggesting an altcoin boom could be likely if liquidity improves and ETH leads the recovery.
Source: TradingView (BTC dominance vs. ETH/BTC ratio)
Meanwhile, the Altcoin Season Index reading was almost neutral (at 43), indicating that it has been a solid BTC season.