Analysts Declare Altcoin ETFs Inevitable Despite Mounting Market Risk Warnings

Wall Street's altcoin obsession reaches fever pitch as regulatory hurdles crumble

The Institutional Stampede

Financial heavyweights are placing billion-dollar bets on crypto's second act—ignoring caution flags waving across traditional finance circles. Major asset managers now treat altcoin ETF approvals as mere formalities rather than possibilities.

Risk? What Risk?

While regulators mumble about volatility and due diligence, institutions see diversification goldmines. They're bypassing conventional warnings about market manipulation and liquidity crunches—because when has chasing yield ever gone wrong?

The Contrarian View

Skeptics whisper about 2017-style euphoria repeating itself, but their voices drown in the chorus of commission checks clearing. One hedge fund manager quipped: "We'll worry about stability after we secure our bonuses."

The New Normal

Traditional portfolio managers who once dismissed crypto now scramble to understand blockchain fundamentals—welcome to the era where ignoring altcoins becomes the career risk. Wall Street's latest embrace proves yet again: nothing accelerates financial innovation like the scent of untouched fees.

Bloomberg Analyst Says Odds for Altcoin ETF Approvals Now at 100% 

Asset managers have been pursuing altcoin ETFs after the successful launches of Bitcoin and ethereum spot funds. A flurry of filings has targeted cryptocurrencies such as Solana (SOL), XRP (XRP), Cardano (ADA), Litecoin (LTC), Dogecoin (DOGE), and more. 

Throughout 2025, the SEC delayed decisions on these proposals, extending deadlines multiple times. Yet, the regulator has also taken measures to streamline the process amid a more accommodating stance toward crypto.

BeInCrypto reported that the SEC approved generic listing standards for spot crypto ETFs on September 17, fueling Optimism about the prospects of altcoin ETFs.

“We’re going to get well over a 100 ETFs probably that are going to be involved in the crypto space in the next six to 12 months,” Bloomberg’s ETF analyst James Seyffart said last week on a podcast.

In line with this, the SEC instructed issuers to withdraw their 19b-4 filings for LTC, XRP, SOL, ADA, and Doge ETFs. Balchunas explained that the 19b-4 filings and their associated review deadlines have become irrelevant now. 

The only remaining requirement is the approval of the S-1 registration statements, which detail the structure and operations of the ETFs. He also added that,

“Honestly, the odds are really 100% now.”

The new forecast comes after Bloomberg analysts had previously raised their approval odds for altcoin ETFs from 90% to 95%.

Will Too Many Crypto ETFs Backfire?

Despite the enthusiasm, concerns about market impacts persist. A user noted that while ETFs can bring growth and higher prices, they also create opportunities for insiders to cash out and risks for inexperienced retail investors.

Furthermore, in a recent statement, SEC Commissioner Caroline Crenshaw warned that these products are ‘nascent and untested’ and pose unique risks tied to the crypto spot markets.

Crenshaw also cautioned that the change further blurs the line between 33 Act ETPs and 40 Act ETFs, stressing that investors might mistakenly believe they enjoy protections that don’t exist.

“One need only look at the risk factors enumerated in the FORM S-1 registration statements for digital asset ETPs to get a sense of the full slate of potential risks, including increased risk of loss and risks associated with the spot market not having comparable guardrails to those that exist in regulated securities markets,” she stated.

Lastly, Nate Geraci argued that the generic standards could undermine digital asset treasuries (DATs), which have benefited from regulatory arbitrage. 

“Think it’s pretty much game over now, especially once staking in ETFs approved. Just buy the real thing or spot ETF,” Geraci remarked.

As potential new crypto ETFs enter the market, the balance between innovation and investor safeguards remains critical. Approvals could inject liquidity and broaden access, but also heighten risks in a volatile sector. Market participants await further SEC actions on pending filings.