If the altcoin ETF is approved in 2025, what impact will it have on the crypto market?

If the altcoin ETF is approved in 2025, it will open up a new inflow window for traditional funds. For example, after the Ethereum ETF was launched, Wall Street purchased nearly 1% of the Ethereum volume. After the altcoin ETF is approved, it is expected to attract a large amount of traditional funds, change the investor structure, increase the proportion of conservative and institutional investors, and improve market stability and maturity.

The passage of more ETF products will bring more funds to enter the crypto market. A large amount of capital injection can enhance market liquidity and provide a more sufficient funding pool for transactions. After the market liquidity is enhanced, price fluctuations can be effectively reduced. In the past, the sharp rise and fall of prices will decrease due to insufficient capital, and the price trend will be more stable, attracting more investors.

The United States launched ETFs, which will trigger other countries and regions to follow suit due to regulatory arbitrage. In areas where regulation is loose, cryptocurrency adoption will grow rapidly. Global policy convergence can reduce the compliance costs of cross-border transactions, eliminate investors' legal risk concerns, attract more institutions and individuals to participate, and promote cryptocurrencies to move from the edge to the mainstream.

The Trump administration supports the crypto industry, and the U.S. states promote "strategic Bitcoin reserves" legislation, the Republicans control both the Senate and the House of Representatives, and Congress is expected to pass the cryptocurrency bill. Once legislation is passed, cryptocurrencies may become a new asset class and are no longer limited to the scope of securities or commodities. They are of epoch-making significance to the crypto market and enhance their position in the financial field.

The impact on altcoins that are highly relevant to the United States is significant. As a representative of the RWA track, ONDO may be the first to be approved to link to tokenized treasury bonds, becoming the core target for traditional institutions to allocate crypto assets. If the FIT21 Act is passed, mainstream DeFi tokens such as UNI, MKR, and AAVE will accelerate their integration into the traditional financial system and usher in new development opportunities.

The approval expectations of the altcoin ETF will change investors' expectations and psychology about the crypto market. Investors expect more capital inflows and more standardized markets to enhance investment confidence. This psychological change prompts more investors to enter the market and promotes market prosperity. However, it may also bring excessive optimism and we need to be wary of the risks of market bubbles.

The approval of altcoin ETF will change the market competition landscape. The altcoins supported by ETFs have increased competitiveness due to capital inflows and increased market attention. This prompts the project team to improve technology and services and promote innovative development in the industry. At the same time, projects that have not received ETF support face greater competitive pressure and may be eliminated by the market and optimize the market ecology.

In order to meet investors' investment needs for altcoin ETFs, related financial services will usher in development. For example, custody services need to ensure the security of ETF assets; trading services need to improve transaction efficiency and stability; investment consulting services need to provide investors with professional investment advice. The development of these financial services further improves the crypto market ecosystem.