US president Donald Trump's return to office has ignited renewed institutional interest in altcoins

This surge reflects a growing recognition of altcoins as viable investment opportunities. In this article, we'll take a deep dive into the dynamic altcoin ETF landscape

U.S. President Donald Trump's return to office has sparked renewed institutional interest in altcoins, leading to a surge in applications for altcoin spot exchange-traded funds (ETFs). This interest is driven by a broader recognition of altcoins as viable investment opportunities, especially among institutional investors.

Following the approval of Bitcoin (BTC) and Ethereum (ETH) spot ETFs earlier in the year, asset managers are now actively pursuing the creation of spot ETFs for other major altcoins.

Among the altcoins that are the main focus of ETF applications are Solana (SOL), Litecoin (LTC), Polkadot (DOT), and XRP. These altcoins have been selected due to their varying characteristics, technical capabilities, and the strengths of the asset managers applying for them.

In this article, we'll take a closer look at the dynamic landscape of altcoin ETF applications, highlighting the key altcoins that are being targeted for ETFs and the potential market impact and regulatory challenges.

What is an altcoin spot ETF application?

An altcoin spot ETF application is a formal request submitted to regulators to create an exchange-traded fund (ETF) that directly holds altcoins (cryptocurrencies other than Bitcoin) as underlying assets.

This allows investors to gain regulated exposure to the altcoins’ real-time market prices without having to purchase and store the altcoins themselves.

How does an altcoin spot ETF application work?

The process of applying for such an ETF in the United States involves several detailed steps, which are primarily overseen by the Securities and Exchange Commission (SEC).

It begins with the asset management firm proposing the ETF and partnering with a national securities exchange—like NYSE, Nasdaq-100 (NDAQ), or Cboe—where the ETF will be listed. This exchange plays a key role in the application process.

Together, they submit Form 19b-4 to the SEC, proposing a rule change to list and trade the new altcoin spot ETF. This form includes details about the ETF's structure, the underlying asset (the altcoin), custody arrangements, and measures to prevent fraudulent and manipulative practices.

Upon receiving Form 19b-4, the SEC initiates a structured review process. The proposed rule change is published in the Federal Register, kicking off the official review period.

This publication also serves as an opportunity for public comment, allowing various stakeholders—including industry experts, investors, and other interested parties—to share their feedback on the proposed ETF.

The SEC can take up to 240 days from the initial filing to make a final decision on the application. Within this timeframe, the agency can extend specific intervals—such as 45 days or 90 days—to collect more information or thoroughly consider public comments.

During its review, the SEC assesses several critical factors to determine if the altcoin is suitable for inclusion in an ETF.

The agency examines the exchange's market surveillance capabilities to ensure it can effectively monitor trading activities and prevent fraud or manipulation.

Additionally, the SEC evaluates the custody solutions to guarantee the safekeeping of the altcoin, protecting it against theft or loss.

Finally, the agency considers the liquidity and market size of the altcoin, assessing its maturity through indicators like trading volume and market capitalization to ensure it can adequately support an ETF structure.

After reviewing all the relevant materials and feedback, the SEC can decide whether to approve the ETF application, allowing the ETF to be listed and traded on the exchange.

However, if the SEC identifies any concerns—such as insufficient investor protection or evidence of market manipulation—it may choose to deny the application.

Moreover, if the agency requires more time to collect information or engage with public feedback, it can choose to delay the application further.

Current altcoin spot ETF application landscape

Following the approval of Bitcoin and Ethereum spot ETFs in the United States earlier this year, asset managers have expanded their focus to other cryptocurrencies.

Major firms Grayscale Investments, Bitwise, VanEck, and Canary Capital have filed applications with the U.S. SEC for ETFs tied to cryptocurrencies such as XRP, Solana, Hedera, and Litecoin.

Among these, Litecoin has a higher likelihood of approval in 2025, according to analysts from Bloomberg Intelligence, who assign a 90% probability. Meanwhile, Dogecoin, Solana, and XRP are seen with 75%, 70%, and 65% chances, respectively.

In the international scene, Brazil's securities regulator, the Comissão de Valores Mobiliários (CVM), has approved the world’s first Spot XRP ETF—Hashdex Nasdaq XRP Index Fund.

This ETF will allow investors to gain direct exposure to XRP through Brazil's B3 stock exchange without the need to purchase and store the cryptocurrency themselves.

Why is there a sudden rise in altcoin spot ETF applications?

Several factors have contributed to the surge in altcoin spot ETF applications.

Growing investor demand: Investors are increasingly seeking diversified exposure