Wall Street has opened its doors, but funds are slowly trickling in, and the cryptocurrency ETF is caught in an embarrassing situation of being well-received but not well-subscribed. Since this month, the four major altcoins, Solana, Ripple, Litecoin, and Hedera, have successively obtained approval from the U.S. SEC to enter the Wall Street stage.

However, these newly listed ETF products generally face the problem of limited capital inflow, with a total net inflow of only about $700 million, far from market expectations. Meanwhile, after the launch of these ETFs, the prices of various cryptocurrencies have fallen instead of rising, with SOL dropping more than 30% since the ETF went live, and other cryptocurrencies also experiencing varying degrees of decline.

I. Current status of the altcoin ETF market

As the US SEC opens a fast track for crypto ETFs, the regulatory environment is becoming clearer, and altcoins are trying to use this opportunity to step onto Wall Street.

Rapid approval, slow capital raising

Since last month, eight altcoin ETFs have been approved successively, covering four crypto projects: Solana, Ripple, Litecoin, and Hedera.

However, in the overall downturn of the crypto market, these products have generally faced limited capital inflow issues after listing, making it difficult to significantly boost coin prices in the short term. From the perspective of capital flow, overall attractiveness remains quite limited, and some ETFs have shown several days of zero inflow.

Market size and insufficient liquidity

AiCoin data shows that as of November 19, Bitcoin's market share is close to 60%, and after excluding ETH and stablecoins, the market share of other altcoins is only 19.88%.

This has resulted in poor liquidity for the underlying assets of altcoin ETFs, and compared to Bitcoin and Ethereum, altcoins are more susceptible to short-term narratives, exhibiting higher volatility and are considered high-risk Beta assets.

Since the beginning of this year, the relative profits of altcoins have mostly fallen into deep surrender territory, with a significant divergence emerging between Bitcoin and altcoins that is rarely seen in past cycles.

II. Analysis of the performance of four major altcoin ETFs

Solana ETF: High Opening, Low Closing

There are currently five Solana spot ETFs in the US, issued by Bitwise, VanEck, Fidelity, Grayscale, and Canary.

The total net inflow of the US Solana spot ETF is approximately $420 million, with a total asset net worth of $594 million. Among them, Bitwise's BSOL contributed the main trading volume, with a cumulative inflow of $388 million over three consecutive weeks, but most of it came from an initial input of nearly $230 million on the first day, after which the capital inflow slowed significantly.

Fidelity's FSOL had a net inflow of only $2.07 million on its first trading day on November 18, Grayscale's GSOL had a cumulative net inflow of about $28.45 million, and Canary's SOLC had no net inflow on its first day of trading.

It is worth noting that all spot ETF issuers support staking functions, which may provide some support for market demand. Since the listing of the first Solana spot ETF on October 28, SOL price has fallen by 31.34% to date.

XRP ETF: Exploding the Next Day

In terms of the XRP spot ETF in the US, the only listed product is XRPC launched by Canary.

Since its launch, XRPC has had a cumulative net inflow of over $270 million. The trading volume on its first day reached $59.22 million but did not generate net inflow; the next day achieved a net inflow of $243 million.

Since the listing of the first Ripple spot ETF on November 13, XRP price has fallen by about 12.71% to date.

Litecoin and HBAR ETF: Weak Capital Inflows

At the end of October this year, Canary Capital officially launched the first ETF tracking Litecoin in the US, LTCC.

As of November 19, LTCC had a cumulative net inflow of about $7.26 million. Daily net inflows are generally only in the tens of thousands of dollars, with several days showing zero inflow. Since the listing of the first Litecoin spot ETF on October 28, LTC price has fallen by about 7.4% to date.

The first ETF tracking HBAR in the US, HBR, was also launched by Canary Capital at the end of last month. SoSoValue data shows that as of November 18, HBR had a cumulative net inflow of about $74.71 million.

Among them, nearly 60% of the funds concentrated in the first week, followed by a significant decline in net inflow, with some days even showing continuous zero inflow. Since the listing of the first Hedera spot ETF on October 28, the HBAR price has fallen by about 25.84% to date.

III. Multiple dilemmas in attracting capital

Liquidity pressure and market manipulation risk

Many altcoins have insufficient liquidity, making them susceptible to price manipulation. The net asset value of ETFs depends on the prices of underlying assets; if altcoin prices are manipulated, it will directly affect ETF value, potentially triggering legal risks or regulatory investigations.

Some altcoins may also be identified as unregistered securities; the current SEC is promoting a token classification plan to distinguish whether cryptocurrencies belong to securities.

Unfavorable macroeconomic environment

The uncertainty of the macroeconomic environment has also intensified investors' risk aversion. In a situation of overall low confidence, investors are more inclined to allocate traditional assets such as US stocks and gold.

This liquidity tightness is also reflected in traditional markets. Recently, gold and US stocks have fallen in sync, signaling market liquidity tightness, forcing investors to sell profitable assets to cover losses in other holdings.

Lack of institutional endorsement

At the same time, altcoin ETFs lack the visibility and market recognition of Bitcoin or Ethereum spot ETFs, especially lacking endorsements from large institutions like BlackRock.

The distribution network, brand effect, and market trust brought by leading issuers are difficult to replicate, further weakening the attractiveness of altcoin ETFs in the current environment.

The regulatory environment is gradually clarifying

As the US regulatory environment gradually clarifies, it may promote a new round of expansion for crypto ETF applications. The SEC has approved general listing standards for crypto ETFs and recently issued new guidelines allowing crypto ETF issuers to expedite the effectiveness of filing documents.

At the same time, the SEC has significantly removed the cryptocurrency-specific chapter that was previously routinely included in the latest fiscal year review focus document. This contrasts with the period when former chairman Gary Gensler emphasized cryptocurrency as a review focus, particularly naming spot Bitcoin and Ethereum ETFs.

The accelerated formation of a regulatory framework and the rapid expansion of ETF products are happening simultaneously. The US Securities and Exchange Commission has begun considering establishing a 'token taxonomy' framework to clarify the legal attributes of different categories of digital assets.

The significance of this change should not be underestimated. For a long time, the US's regulation of the crypto industry has relied more on enforcement actions. As regulatory agencies shift to establishing an operable rule system, crypto assets are expected to be truly integrated into the traditional financial regulatory framework.

The staking function may become a breakthrough

The introduction of staking functions is believed to stimulate institutional investor demand, thus attracting more issuers to join the ETF application queue. Research from Swiss crypto bank Sygnum shows that despite a significant market correction recently, institutional investor confidence in crypto assets remains strong.

Over 80% of institutions expressed interest in crypto ETFs beyond Bitcoin and Ethereum, with 70% stating that if ETFs could offer staking yields, they would start or increase investments.

At the policy level, positive signals regarding ETF staking have also emerged. Recently, US Treasury Secretary Scott Bessent issued a new statement indicating that he will work with the IRS to update guidance to provide regulatory support for crypto ETPs that include staking functions.

This move is believed to potentially accelerate the approval time for Ethereum staking ETPs while paving the way for multi-chain staking products for networks like Solana, Avalanche, and Cosmos.

More altcoin ETFs are still being promoted

In addition to the above projects, the next crypto assets such as DOGE, ADA, INJ, AVAX, BONK, and LINK are still advancing their spot ETFs, among which Bloomberg analyst Eric Balchunas expects Grayscale's Dogecoin ETF to launch on November 24.

Currently, there are 155 ETP (Exchange-Traded Products) applications in the crypto market, covering 35 types of digital assets, including Bitcoin, Ethereum, Solana, XRP, and LTC, showing a land-grab growth. With the end of the US government shutdown, the approval process for these ETFs is expected to accelerate.

V. Challenges and Opportunities Coexist

Market structure changes

The current bull market led by Bitcoin ETFs cannot transmit liquidity to the altcoin market, resulting in a difficulty in achieving a widespread bullish trend.

A harsh reality is that most of the funds flowing into Bitcoin come through ETF channels, and these massive capitals are locked within the traditional financial system. This directly breaks the historical 'trickle-down effect', leaving the altcoin market, which traditionally relied on BTC profit returns, facing liquidity shortages.

What's worse is that there are now nearly 42 million types of altcoins in the market, and liquidity has been dispersed to the extreme. The traditional broad-based bullish model is nearly impossible to reproduce.

Investor strategy shift

Investors may be more inclined to adopt a diversified, decentralized portfolio of altcoin ETF strategies to reduce risk and enhance potential returns.

At the market level, recent crypto asset prices have experienced turbulent adjustments. Some ETFs have shown signs of capital outflows, while on-chain activity and trading demand have not improved significantly.

Despite the institutional pathway being opened up, short-term liquidity tightness and fluctuations in market sentiment will still affect asset prices. In other words, regulatory benefits will not immediately lead to a one-sided market; instead, it may create a phase where 'policy expectations do not match actual liquidity'.

In such an environment, investment strategies must be more robust and flexible. First, mainstream assets and compliant ETFs should be core allocations to reduce policy risks and compliance uncertainties. Secondly, maintaining a moderate amount of cash and high liquidity assets can help maintain responsiveness during market fluctuations. Furthermore, diversification in geography and asset types is also crucial.

Bitcoin's market share in the crypto market remains close to 60%, while excluding ETH and stablecoins, all other altcoins only account for 19.88% of the market share. This stark disparity clearly explains why Wall Street is cautious about altcoin ETFs.

In the future, as more altcoin ETFs gain approval, the market will be reshuffled, and only those tokens with actual utility, clear value propositions, and strong liquidity can stand out in the wave of institutionalization.#币安合约实盘