The Wolf Den #1201 - How Will Altcoin ETFs Perform?
As well as Bitcoin?
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In This Issue:
How Will Altcoin ETFs Perform?
Bitcoin Thoughts And Analysis
Altcoin Charts
U.S. Stock Rally Cools After Six-Day Climb
Arthur Hayes Has Some Bold Predictions
Strategy Buys Bitcoin and Catches A Lawsuit
JP Morgan Bends The Knee To Bitcoin
SEC Delays SOL ETF
Bitcoin To Crash To $88K? Charts Signal Massive Sell-Off! | Macro Monday
How Will Altcoin ETFs Perform?
The Bitcoin ETFs have been an undeniable success. In the lead-up to their launch - and in the months that followed - I closely tracked what the market got right, and more importantly, what it got wrong. While many correctly anticipated approval and early inflows, few understood just how massive the demand would be.
Once Bitcoin made its historic debut on Wall Street, the next logical question was: how would the Ethereum ETF perform? Could it generate similar momentum? Would flows mirror its share of the total crypto market cap? How long would Grayscale redemptions drag on performance? And perhaps most importantly - would traditional finance even understand what Ethereum actually is?
Most of those questions now have answers. But a new wave of speculation is already forming: Will altcoin ETFs get approved next? How will they stack up against Ethereum? And is there enough demand to sustain more speculative offerings like PENGU, HBAR, or DOGE?
Let’s dig into those questions - starting with how ETH is performing relative to BTC.
From SOSO Value, here are some overall metrics:
BTC
ETH
To compare ETH and BTC ETF performance, I’m using current market caps: Bitcoin at $2.08 trillion, Ethereum at $304 billion.
Bitcoin (BTC)
Market Cap: $2.08 trillion
Cumulative Total Net Inflow: $41.77 billion
Total Value Traded: $2.70 billion
Total Net Assets: $122.67 billion
That $41.77 billion in net inflows represents roughly 2.01% of Bitcoin’s market cap. Meanwhile, the $122.67 billion in Bitcoin-related ETF assets amounts to about 6% of the total market cap.
Ethereum (ETH)
Market Cap: $304 billion
Cumulative Total Net Inflow: $2.51 billion
Total Value Traded: $213.9 million
Total Net Assets: $8.97 billion
Here, the $2.51 billion in net inflows equals 0.83% of Ethereum’s market cap, and total ETH ETF assets sit at roughly 3% of that cap.
In short: Bitcoin’s ETF net inflow, at 2.01% of market cap, more than doubles Ethereum’s 0.83%. BTC-related products hold twice the proportional share of total net assets as ETH-related products. This shows that Bitcoin continues to attract stronger and more concentrated demand through ETF channels – at least so far.
That said, some important context helps explain why.
A) BTC ETFs launched earlier.
Bitcoin’s ETF began trading on January 11, 2024 – giving it nearly 16 months in the spotlight. Ethereum’s ETF, in contrast, debuted July 23, 2024 – meaning it’s only had about 10 months to gain traction. That extra runway matters, especially for institutions that move slowly and often need months to evaluate new products.
B) Ethereum saw harsher initial outflows.
ETHE suffered over $1.5 billion in outflows in its first week – 5% of assets on day one alone. High fees and aggressive competition from low-cost issuers accelerated those exits. By contrast, GBTC’s $21 billion in outflows were more gradual, spread across a full year.
C) No staking in ETH ETFs.
ETH staking is core to the protocol’s value proposition. Without it, ETH ETFs don’t offer exposure to the yield ETH holders earn directly. That makes these products less attractive to those seeking both price exposure and passive income. Ethereum is also more complex to understand than Bitcoin, and it simply hasn’t had as much time to educate traditional investors.
None of this is to excuse ETH’s relative underperformance – but the context matters. It helps set expectations for how altcoin ETFs might perform in the future.
My take is that most of the altcoin ETF applications currently in the pipeline will be approved. That includes XRP, SOL, and LTC. The odds are a bit lower for more speculative filings like DOGE and PENGU – but even those may eventually pass.
However, I don’t expect any of them to outperform Ethereum in the near term.
While they won’t have to deal with massive Grayscale-related outflows like BTC and ETH did, I still don’t see a clear path for them to surpass ETH in either inflows or legitimacy. The demand just isn’t comparable yet.
From here, I see two potential paths for altcoin ETFs:
They mirror the historical performance of their underlying assets.
These ETFs become passive wrappers – useful for regulated access, but not game-changing. They’ll track price movements, not drive them.They unlock fresh demand from new investors.
If structured well and introduced at the right time, they could attract institutional interest in previously hard-to-access assets – creating new inflows, building legitimacy, and shifting market dynamics.
The second scenario is ideal, but I think the first is more likely – at least initially. ETF approval alone likely won’t be enough to create sustained upside. Long-term performance will still depend on whether each protocol delivers real utility and network growth.
That said, I do expect a solid initial pump after approval. But unless Bitcoin dominance pulls back and sentiment shifts heavily toward altcoins, that rally may be short-lived. If the timing aligns just right, though, these approvals could help ignite the next true altcoin season.
I don’t think these alt ETFs will erode Ethereum’s lead – especially since BlackRock hasn’t filed for any of them. If BlackRock were to prioritize ETH staking before touching any altcoin ETF, it would signal strong conviction in Ethereum’s long-term value. If they filed for another altcoin first, it would suggest a shifting institutional focus. Either way, the order of filings will say a lot.
That wraps up my take on altcoin ETFs.
I’m not claiming to have all the answers. If there’s one constant in crypto, it’s surprise. If you think a DOGE ETF is going to send your bags flying 300%, I won’t try to talk you out of it. But if this breakdown resonates, maybe spend a little less time hoping for an ETF pump – and a little more time understanding what actually gives your favorite asset long-term value.
Before you move on, two quick developments worth sharing…
Coinbase is once again under investigation - this company just can’t seem to catch a break. On a more positive note, both Coinbase and Ripple are reportedly bidding to acquire Circle, which is a fascinating development. If one of them ends up securing the deal, I’m rooting for Coinbase. Not only has USDC been deeply integrated into their platform for years, but as a shareholder, I’d love to see them come out on top.
Bitcoin Thoughts And Analysis
We now have a confirmed bearish divergence on the daily chart. Price printed a higher high while RSI made a lower high and rolled over out of overbought territory – a classic warning signal.
This divergence has been brewing across multiple time frames, and now we’re seeing it confirmed on the daily. The recent push to new highs came on low volume over the weekend, and the follow-through has been weak. In fact, price dropped immediately after the highest daily and weekly close in Bitcoin’s history – not the reaction bulls were hoping for.
The trend is still intact for now, but this is a textbook spot to proceed with caution. Bearish divergences don’t always play out immediately, but they often mark local tops or at least short-term consolidation.
If $106,000 fails to hold as support, we could be looking at a return to the $99,500 area.
U.S. Stock Rally Cools After Six-Day Climb
The S&P 500’s six-day winning streak is set to pause as US equities retreat slightly, with futures down 0.3% amid concerns that American stocks may underperform global peers. In contrast, European and Asian equities advanced, supported by improving economic sentiment abroad. While gold edged higher and the dollar held steady, Bitcoin dipped 0.3%. Treasuries gave up early gains, with the 10-year yield ticking up to 4.46%.
Investors are grappling with the Federal Reserve’s cautious stance, as officials signal a wait-and-see approach on interest rate cuts. Strategists from Citigroup and La Francaise Asset Management suggest that the next wave of gains may come from Europe, driven by structural investment in defense and infrastructure. Despite recent gains in US stocks, European equities are now seen as more attractively valued relative to long-term norms.
Retail investors continue to fuel a “buy-the-dip” mentality in the US, though global currency dynamics could shift further. The dollar has already lost nearly 6.5% this year and could face additional pressure as G7 leaders meet to discuss trade and currency policy. Citigroup analysts believe Washington is unlikely to push aggressively for a weaker dollar, but diplomatic compromises on tariffs could lead to a continued decline.
Meanwhile, political and fiscal concerns remain in focus. President Trump is pressing House Republicans to rally behind his proposed tax cuts, even as Moody’s recent credit downgrade highlights the widening federal deficit. A full slate of Fed speakers this week could offer further clarity on the policy outlook.
On the corporate front, Home Depot missed sales expectations, signaling consumer caution. In Asia, CATL soared in its Hong Kong debut, marking the biggest listing of the year, while Apple’s China-to-US shipments dropped to their lowest level since 2011. Pfizer struck a $1.25 billion deal to license a Chinese cancer drug, underscoring growing interest in China’s biotech innovation.
Stocks
S&P 500 futures fell 0.3% as of 6:37 a.m. New York time
Nasdaq 100 futures fell 0.4%
Futures on the Dow Jones Industrial Average were little changed
The Stoxx Europe 600 rose 0.5%
The MSCI World Index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.1243
The British pound was little changed at $1.3356
The Japanese yen rose 0.2% to 144.58 per dollar
Cryptocurrencies
Bitcoin fell 0.3% to $105,130.33
Ether fell 0.3% to $2,513.93
Bonds
The yield on 10-year Treasuries advanced one basis point to 4.46%
Germany’s 10-year yield was little changed at 2.58%
Britain’s 10-year yield declined two basis points to 4.65%
Commodities
West Texas Intermediate crude fell 0.2% to $62.54 a barrel
Spot gold rose 0.1% to $3,233.30 an ounce
Arthur Hayes Has Some Bold Predictions
Crypto legend Arthur Hayes has done a handful of interviews recently, recounting his predictions for the year and I captured the main quotes and summary below.
“I think Bitcoin needs to go above $110k and increasing volumes reach $150k-200k. I think that happens sometimes in the summer or early third quarter and then the rotation starts into various altcoins.”
“I think Bitcoin in this next little run could go close to $200,000. And then altcoin season comes around.”
“And I still believe that the US is going to revalue their gold holdings much higher to depreciate the dollar against gold. So, I think gold could be $10,000-20,000 by the time we finish with this rally.”
“I think by the end of Trump’s presidency, the end of 2028 Bitcoin will be about 1 million dollars.”
“I think people’s expectations are very very high and they think that crypto is the number one thing that Trump needs to focus on. You know, Trump’s a politician, he’s got a lot of things he’s got to focus on, so I think people need to be patient.”
“I believe that the US government has to borrow more money than what we think, and therefore, [Treasury Secretary] Bessent will have to issue more debt and therefore he needs to find a way for these individuals to obtain as much leverage as possible through the banking system and ultimately that means that there’s more dollars floating around in the world because the US government is spending more money on stuff.”
On the topic of altcoins specifically, I don’t have a direct quote, but to paraphrase, Arthur Hayes believes Ethereum will outperform Solana over the next 18 to 24 months, despite Solana’s recent price surge and breakout past its 2021 peak. He cites Ethereum’s strength in total value locked, developer activity, and security as reasons it remains the more robust and reliable investment.
Strategy Buys Bitcoin… And Catches A Lawsuit
As expected, Strategy purchased Bitcoin on Monday, now on a six-week purchasing streak and inching closer to the 600,000 BTC mark, but unexpected was the company now facing a class action lawsuit. As per the 8-K, the investors are, “alleging that the named defendants made false and/or misleading statements with respect to and/or failed to disclose information with respect to the anticipated profitability of our bitcoin-focused investment strategy and treasury operations, and the various risks associated with bitcoin’s volatility and the magnitude of the losses…At this time, we cannot predict the outcome, or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.”
I'm not a lawyer, and none of this constitutes legal or professional advice - but my first instinct is that this lawsuit is nonsense. If anything, Strategy has been one of the most transparent companies when it comes to its Bitcoin acquisition strategy. I'm not sure what exactly investors think has been “failed to be disclosed.” My suspicion is that some investors are simply frustrated that MSTR tends to fall when Bitcoin does. Ironically, the stock was up yesterday, despite news of the lawsuit.
JP Morgan Bends The Knee To Bitcoin
Jamie Dimon, CEO of JPMorgan, has made plenty of critical remarks about Bitcoin - but that hasn't stopped his $4 trillion firm from taking a different approach in practice. As it stands, JPMorgan clients can now buy Bitcoin, even though the firm doesn’t yet offer custody services for it. This shift comes despite Dimon publicly dismissing Bitcoin as a “decentralized Ponzi scheme,” claiming “it does nothing,” and even calling it a “fraud.” Yet, in a telling reversal, he recently stated, “I defend your right to buy Bitcoin.” I can’t help but wonder how many clients pulled assets from JPMorgan - or left altogether - because, until recently, the platform didn’t support Bitcoin purchases. It was likely a substantial number - enough that even the CEO no longer gets his way with the asset class.
Welcome, JPMorgan. We all hope you buy lots of Bitcoin.
SEC Delays SOL ETF
The SEC has delayed its decision on two proposed Solana ETFs - 21Shares Core Solana ETF and Bitwise Solana ETF - and is seeking public comment. While the agency hasn't reached a conclusion, it continues to review a growing number of crypto ETF proposals, reflecting a more open stance toward digital assets. Other ETFs under review include XRP, DOGE, LTC, HBAR, AVAX, ADA, SUI, DOT, and more. My guess is that they’ll all be greenlit around the same time, which should kick off another altcoin run.
Bitcoin To Crash To $88K? Charts Signal Massive Sell-Off! | Macro Monday
Join Dave Weisberger, Mike McGlone, and James Lavish as we break down the latest chaos in macro and crypto! Moody’s downgrade of U.S. credit has markets reeling, driving bonds, stocks, and the dollar lower as gold surges. Meanwhile, the UK overtakes China as America's second-largest creditor, underscoring a major shift in global financial dynamics. Plus, Bitcoin's wild swing from $106K to $103K catches traders by surprise - are these sudden liquidations signaling a local top?
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.