Just a year ago, Bitcoin was the main magnet for large investors. Today, however, attention is shifting elsewhere. More and more institutional investors – banks, funds, and other major players – are betting on altcoins, cryptocurrencies outside of Bitcoin. And the demand is strong.

According to data from SosoValue, Ethereum ETFs attracted $9.6 billion in inflows in Q3 2025, while Bitcoin ETFs received “only” $8.7 billion. This marks the first clear sign that investors want exposure to cryptocurrencies beyond Bitcoin.

What are ETFs, anyway?

For everyday investors, ETFs offer an easy way to gain crypto exposure without directly buying or managing cryptocurrencies. An ETF (Exchange-Traded Fund) is a regulated investment product that tracks the price of an asset – such as Bitcoin or Ethereum – and trades on exchanges like a stock.

When investors buy an ETF, they don’t own the crypto itself but have a claim on its value. For many institutions, this represents a safer and more compliant way to enter the crypto space.

Altcoins as the next big wave

According to Leon Waidmann, Head of Research at Onchain, the arrival of altcoin ETFs is a natural continuation of the trend.

“After the success of Bitcoin and Ethereum funds, the next step is clear – to open the door to other cryptocurrencies. Regulation has shown it’s possible, and investors are responding,” said Waidmann.

The U.S. Securities and Exchange Commission (SEC) received five new applications for altcoin ETFs in October. Although the government shutdown slowed the process, analysts expect the first approvals to come within months.

Among the cryptocurrencies attracting the most investor interest are Uniswap (UNI), Aave (AAVE), and Chainlink (LINK) – projects with real-world use cases in DeFi (decentralized finance).

One big exception

There is, however, one major question mark. BlackRock, the world’s largest asset manager, has not yet joined the altcoin ETF race – and its involvement could be pivotal.

BlackRock manages the most successful Bitcoin ETF, which now oversees $28.1 billion in assets. Without it, other Bitcoin funds would have seen net outflows – $1.27 billion, according to K33 analysts.

“If BlackRock doesn’t join the altcoin push, the launch could be slower, with smaller capital inflows,” explained Vetle Lunde, analyst at K33.

A new chapter for crypto

Despite that, optimism remains high. After years of Bitcoin and Ethereum dominance, the market appears to be broadening to a wider range of cryptocurrencies – in a way that appeals even to conservative investors.

Altcoin ETFs could thus mark the next milestone in crypto’s evolution. If approved and trusted by investors, they may unleash another long-term growth wave.

Sources:

https://cointelegraph.com/news/institutions-discover-altcoins-etfs-bitcoin-ethereum-analyst

https://sosovalue.com/assets/etf/Total_Crypto_Spot_ETF_Fund_Flow?page=usBTC

https://app.nansen.ai/smart-money?tab=tokens

https://x.com/VetleLunde/status/1983103722873110923