• U.S. altcoin ETFs for XRP, LTC, HBAR, and SOL may gain approval soon, expanding institutional access to digital assets.
  • BlackRock dominates the U.S. Bitcoin ETF market and could lead the altcoin ETF segment with competitive fees and institutional reach.
  • Spot BTC and ETH ETFs have attracted $39.19 billion in net assets, signaling potential inflows into upcoming altcoin ETFs.

The potential approval of altcoin exchange-traded funds (ETFs) in the United States could significantly transform the cryptocurrency market. Bloomberg ETF analyst Eric Balchunas anticipates that several altcoin ETFs, including those for XRP, Litecoin (LTC), Hedera (HBAR), and Solana (SOL), could soon gain regulatory approval.These developments may enhance investor access to digital assets, broadening participation in the crypto market.

Altcoin ETFs May Follow Bitcoin and Ether

Initially, Balchunas suggests that the wave of approvals could involve ETFs combining Bitcoin (BTC) and Ether (ETH), followed by standalone Litecoin ETFs. Given its classification as a commodity, similar to Bitcoin, Litecoin is well-positioned for ETF approval . Moreover, Hedera-based ETFs may also enter the market, as HBAR is not classified as a security.

We expect a wave of cryptocurrency ETFs next year, albeit not all at once. First out is likely the btc + eth combo ETFs, then prob Litecoin (bc its fork of btc = commodity), then HBAR (bc not labeled security) and then XRP/Solana (which have been labeled securities in pending… pic.twitter.com/29vMdciZxE

— Eric Balchunas (@EricBalchunas) December 17, 2024

Interestingly, XRP and Solana ETFs could secure approval despite their ongoing classification as securities in lawsuits involving major crypto firms. These advancements could signal a new phase of regulatory clarity, allowing altcoins to gain mainstream traction through institutional products like ETFs.

BlackRock’s Role in Shaping the ETF Market

BlackRock, a dominant player in the U.S. Bitcoin ETF market, could play a crucial role in the altcoin ETF space. Currently, its iShares Bitcoin Trust (IBIT) leads the sector with $58.57 billion in net assets, while its spot ETH ETF holds $4.04 billion. This dominance, coupled with competitive fees, could position BlackRock as a leader in the altcoin ETF market.

However, although BlackRock’s Head of Digital Assets, Robert Mitchnick, noted earlier this year that client demand remains focused on Bitcoin and Ethereum, the introduction of altcoin ETFs may shift this trend. Institutional interest in broader crypto assets could increase if these ETFs replicate the success of Bitcoin and Ether ETFs.

Therefore, the launch of altcoin ETFs could mirror the success of U.S. spot BTC and ETH ETFs, which have already attracted billions in net assets. According to SoSoValue data, Bitcoin ETFs have amassed $36.73 billion, while Ether ETFs hold $2.46 billion. 

Similar inflows into altcoin ETFs could drive up the prices of LTC, HBAR, XRP, and SOL as the market approaches 2024.

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