A surge of imitation ETFs is applying; is the ETF 2.0 era about to arrive?

Author: Ashley, BlockBeats

After Trump announced a high-profile cryptocurrency strategic reserve, traditional financial institutions have been quick to respond, despite the market price performance being lackluster. Following the SEC's confirmation of several traditional giants in the U.S. applying for ETFs for LTC, DOGE, SOL, and XRP in February this year, favorable policies and relaxed SEC regulations have led to frequent updates regarding altcoin ETFs this week.

Latest Altcoins Applying for ETFs

The order of filing for ETFs in the U.S. is as follows: the issuer submits the S-1/S-3 forms, then the exchange submits the 19b-4 form, followed by a public comment period, after which the SEC reviews and provides feedback, and finally, approval is granted. The entire process takes about 6 to 8 months, depending on the SEC's review progress. Below are the recent altcoins applying for ETFs and their market data over the past 30 days, sorted by application date.

ADA (Cardano)

On February 25, the U.S. Securities and Exchange Commission (SEC) confirmed the acceptance of the spot Cardano (ADA) ETF listing application submitted by NYSE Arca on behalf of Grayscale. This application was submitted on February 10 and will be custodied by Coinbase Custody Trust Company, with BNY Mellon responsible for asset services and administration.

On March 2, Trump posted on social media "calling" for ADA and other cryptocurrencies as part of the strategic reserve, leading to a more than 70% increase in ADA's price that day.

DOT (Polkadot)

On February 25, Nasdaq submitted the 19b-4 application for the Grayscale DOT ETF (Grayscale Polkadot Trust).

HBAR (Hedera)

On February 24, Nasdaq submitted the 19b-4 application for the HBAR ETF from Canadian investment firm Canary Capital; on March 4, Nasdaq submitted the 19b-4 application for the Grayscale Hedera ETF.

Hedera is often seen as a dark horse in the cryptocurrency space. The most anticipated aspect is the potential launch of a spot HBAR ETF, as Valour Funds has submitted an application for a physically backed product on the Euronext exchange in Europe. Meanwhile, Canary Capital has submitted an application for a domestic spot HBAR ETF in the U.S., further raising market expectations, with investors closely monitoring regulatory dynamics in the post-election environment.

AXL (Axelar)

On March 6, Canary submitted the S-1 application for its AXL ETF.

Additionally, former Coinbase legal chief Brian Brooks has joined Axelar's new institutional advisory board, focusing on regulatory coordination and institutional adoption.

BlockBeats previously reported that Canary Capital launched the AXL (Axelar) trust fund, Canary AXL Trust, which will include the native tokens of the Axelar network, marking the first investment trust offering a universal blockchain interoperability protocol.

This trust fund will provide institutional investors with investment opportunities in blockchain interconnectivity technologies, connecting the Web3 ecosystem, including XRP Ledger, Hedera, Stellar, TON, Sui, Solana, and Bitcoin.

APT (Aptos)

On March 6, Bitwise officially submitted the S-1 application to the SEC for the potential launch of an Aptos ETF, marking the first step in bringing the Aptos ETF to the U.S. market.

Aptos is seeking to launch a U.S.-listed ETF in collaboration with major asset management firms, making it one of the few cryptocurrency protocols globally to achieve this milestone.

Previously, Bitwise launched the Aptos Staking ETP on the Swiss Stock Exchange in November 2024, allowing for staking of Aptos tokens.

How is the Ethereum ETF Performing After Approval?

The Ethereum ETF officially launched in the U.S. capital market on July 23 last year, with Ethereum's price around $3200 that day. Market data shows that the net inflow since the Ethereum ETF went live for about six months has been $2.76 billion, equivalent to Wall Street purchasing nearly 1% of Ethereum, while Ethereum's price has now dropped to around $2300.

This is partly due to Grayscale continuously selling off its Ethereum ETF, becoming the market's largest seller, which has hindered Ethereum's price increase; on the other hand, Ethereum is more severely affected by whale selling compared to Bitcoin, and it is still digesting the potential selling pressure from whales.

The good news is that Trump's related entity, World Finance Liberty, is continuously increasing its holdings in Ethereum. The net inflow into the ETF and the ongoing purchases by Trump-related institutions indicate that in an increasingly open policy environment, long-term investors have a positive outlook on Ethereum.

Similarly, if the aforementioned altcoin ETFs are approved in 2025, although this category of ETFs will become a window for traditional capital inflow, it does not necessarily mean that these tokens will show a significant upward trend.

Cryptocurrency ETFs 2.0 Under Trump

Looking at the development history of cryptocurrency ETFs, it is evident that Trump's return to the White House this year has brought significant benefits to the entire market. Bloomberg analyst Eric Balchunas pointed out that before Trump won the election, the approval probability for all assets, except Litecoin, remained below 5%. It is expected that as applications enter the approval process and the SEC's decision deadline approaches, the approval probability for cryptocurrency ETFs will continue to rise.

What Impact Will This Have on the Cryptocurrency Market?

Bloomberg analysts expect the SEC to make a decision on the proposed altcoin ETFs in October this year. It is foreseeable that if altcoin ETFs are consecutively approved, various favorable factors will likely continue to attract more conservative and institutional investors, thereby changing the investor structure of the market. Under this policy environment, the cryptocurrency market may experience increased liquidity, rising prices, and changes in investor structure. Therefore, the approval of more ETF products will also bring more capital into the cryptocurrency market, enhancing market liquidity and reducing price volatility.

Additionally, due to the existence of regulatory arbitrage, the ETFs launched in the U.S. may directly inspire other countries and regions around the world to follow suit. This imitation could promote the global adoption of cryptocurrencies to varying degrees, especially in regions with more relaxed regulations, where cryptocurrency adoption is likely to see rapid growth. The global convergence of policies can effectively reduce the compliance costs of cross-border transactions and further eliminate investors' concerns about legal risks, thereby promoting greater participation from institutions and individuals. This trend may accelerate the transition of cryptocurrencies from fringe assets to mainstream financial instruments, continuously elevating their status in the global economy.

As the Trump administration further supports the cryptocurrency industry, U.S. states are gradually introducing "strategic Bitcoin reserve" legislation, and with the Republican Party controlling both houses of Congress, there may be an opportunity for Congress to pass cryptocurrency-related legislation. Once legislation is passed, cryptocurrencies may become a new asset class that is neither classified as securities nor commodities, which would have epoch-making significance for the cryptocurrency market.

Which Other Altcoins Might Apply for ETFs?

As the Trump administration continues to loosen cryptocurrency regulations, 2025 may see a peak in applications for altcoin ETFs. Some institutions have predicted that the surge in demand for cryptocurrency ETFs will lead to total assets in North America surpassing those of precious metal ETFs, making it the third-largest asset class in the rapidly growing $15 trillion ETF industry, following stocks and bonds.

In particular, altcoins that are highly relevant to the U.S. market are more likely to be favored. For example, ONDO (Ondo Finance), as a representative of the RWA track anchored to real assets like U.S. Treasury bonds, may be the first to obtain approval for an ETF linked to tokenized government bonds, potentially becoming a core target for traditional institutions to allocate cryptocurrency assets. If the FIT21 bill is passed within the year, establishing the principle of "decentralized protocol exemption from securities law," mainstream U.S. DeFi tokens like UNI (Uniswap), MKR (MakerDAO), and AAVE (Aave) may accelerate their integration into the traditional financial system.