Key facts: “The launch of ETH ETFs was disappointing,” according to NYDIG. VanEck estimates that an XRP cryptocurrency ETF would not have sufficient demand. Despite the growing interest in the cryptocurrency market, altcoins, digital currencies other than bitcoin (BTC), face a significant challenge: the lack of interest from most large institutional investors. Recent developments demonstrate a clear preference for bitcoin among investment funds and large capitals. Last May, the United States approved eight Ether (ETH) ETFs, the cryptocurrency of Ethereum, which opened the debate on the possibility of other cryptoassets having similar financial instruments in the future. In July, VanEck and 21Shares, two digital asset managers, requested authorization to issue funds based on the solana cryptocurrency (SUN).
BlackRock and its vision of a solana ETF
However, the investment giant BlackRock sees no chance of a SOL ETF being approved in the near futureThe company argues that Solana does not yet meet its standards to be included in an exchange-traded fund. In addition, it considers the investment capacity and opinion of its clients, as reported by BitcoinDynamic. So far, the only ones that meet all the requirements to have an ETF are BTC and ETH, highlighted Samara Cohen, CIO of ETFs at BlackRock.
Samara Cohen, CIO of BlackRock. Source: YouTube – Screenshot by BitcoinDynamic. The fact that a company with BlackRock's solid reputation is not clear about a solana fund could slow down the chances of approvalBlackRock is not only the largest asset manager in the world, but is also recognized for its innovation and leadership in the investment industry. It currently manages approximately 9 trillion dollars in assets, which highlights its dominance and confidence in the global market. Other factor that may hold back solana ETFs It is related to regulations. Hester Peirce, a member of the US Securities and Exchange Commission (SEC), was not optimistic about SOL funds.
XRP is not convincing enough to have an ETF
A similar scenario to SOL is faced by XRP, the cryptocurrency issued by the Ripple company. This is the opinion of Matthew Sigel, head of Digital Asset Research at VanEck. Sigel considers it unlikely that an exchange-traded fund based on XRP will be issued. To launch a financial instrument of this nature, the issuer must have the conviction that the asset is a good investment and consider who its creators are, which exchanges it is present on, and the custodian of funds that back this asset. “When we think about XRP, we notice that there is a lack of conviction and customer demand, so I would say that an ETF for that asset is less likely,” Sigel commented. Another factor to take into account is the performance of XRP. For the past three years, the price of cryptocurrency has remained stagnant between the ranges of 0.2 and 0.9 dollars, remaining 84% away from its historical maximum reached in January 2018, when it reached 3.84 dollars. In addition, there is no perception of greater use of the currency for payments, as its issuing company intends.
Ethereum ETFs are not that successful
As explained at the beginning of this article, Ethereum ETFs were launched last July. However, His performance was not as expected by many. For analysts at the investment firm NYDIG, the launch of the ether ETFs was “disappointing.” “Public analysis claiming that these funds are collectively successful appears to lack objectivity or analytical rigor,” the firm said. NYDIG stresses that this behavior shows a contrast with bitcoin ETFs, since these monopolized sustained capital inflows in their early days. Comparing the launch of ether ETFs to bitcoin ETFs offers valuable insights, he noted. From his perspective, It is anticipated that its performance could be worse than expected by the market.. Altcoins like SOL or XRP must face bitcoin, which remains the king of the digital asset marketIn fact, its market cap currently accounts for more than 55% of the total cryptoasset market, its highest dominance in three years since April 2021.
There are companies that do invest in altcoins
Although it is perceived that there is not much interest from investors in altcoins, Some projects in the altcoin universe have attracted large capitals. Last May, venture capital firm Pantera Capital invested in The Open Network (TON) ecosystem and opened a fundraising round with a minimum investment of $250,000. One of the main reasons for this investment It is the great integration that TON has in the Telegram messaging applicationsaid Cosmo Jiang, portfolio manager at Pantera Capital.
Cosmo Jiang, portfolio manager at Pantera Capital. Source: YouTube – Screenshot by BitcoinDynamic. This popular application, with more than 900 million active users per month, has incorporated a cryptocurrency wallet directly into its platform. The growth of the TON network This was evidenced by the increase in daily active addresses, which increased by 3,000%.growing from 9,800 to 314,000 in the past year. Although there is no official link between TON and Telegram, the cryptocurrency network and the messaging app share a common past. Jiang argues that There are now more mature projects with solid business models and financial data availableallowing them to invest with a broad vision in each initiative.