Author: zhou, ChainCatcher
In the past month, a series of emerging crypto projects—DOGE, XRP, Solana (SOL), Litecoin (LTC), Hedera (HBAR), Chainlink (LINK), and others—have had their spot ETFs approved and listed. Contrary to market expectations, the prices of these assets did not soar following their ETF launches. Instead, despite continuous capital inflows, significant price pullbacks have sparked reflection: Does ETF approval still provide long-term effective support for token prices?
- Price Pressure: Short-term Sentiment and Speculator Washout
Between late October and November, the market saw a concentrated listing of emerging crypto asset ETFs. However, according to SoSoValue data, a decoupling between continuous capital inflows and plummeting prices has been common among these assets:
Solana (SOL): Since its late October launch, the SOL ETF has recorded net inflows for four consecutive weeks, with total net assets now reaching $918 million. Bitwise and Grayscale ETFs contributed $631 million and $148 million, respectively. However, SOL’s spot price has fallen from around $184 on October 31 to about $143 now—a drop of over 20%.
XRP: The first XRP ETF launched on November 13, with a first-day trading volume of $59.22 million and continuous net inflows starting the following day. However, XRP’s spot price dropped by more than 20% from $2.38 on November 13, now stabilizing around $2.2.
HBAR: Launched on October 28, the HBAR ETF has achieved five consecutive weeks of net inflows, with total net assets reaching $65.49 million, but HBAR’s spot price has fallen nearly 20%.
DOGE: The DOGE ETF launched on November 24 with no net inflows on its first day and $1.41 million in trading volume. The two listed DOGE spot ETFs have a total net asset value of $6.48 million, with no significant DOGE price movement.
LTC: The LTC spot ETF launched on November 5, with total net inflows of $7.26 million to date. However, several days over the past month saw zero daily net inflows. Since the launch of the Canary LTC spot ETF on October 28, the LTC price has dropped by about 14%.
It’s clear that except for the Litecoin ETF, all other token ETFs show continuous capital inflows, but token prices have without exception fallen or consolidated.
This decoupling may stem from a combination of macro factors and speculative behavior.
First, it must be acknowledged that the overall crypto market environment during ETF approvals was not in a euphoric bull phase. The performance of core assets confirms this: Bitcoin ETFs saw net outflows of $3.48 billion in November, while Ethereum ETFs saw net outflows of $1.42 billion. The massive outflows from core assets created strong negative sentiment and macro headwinds, offsetting the incremental benefits brought by the new ETFs. In this environment, “buy the rumor, sell the news” behavior caused speculators to sell heavily upon the realization of good news, creating short-term sell pressure.
Second, during market downturns, the selling sentiment for less liquid altcoins is amplified. Compared to Bitcoin, tokens like XRP and SOL have shallower market depth, with limited capacity to absorb sell-offs. At the same time, capital inflows are relatively slow, with institutions still in observation mode, and their gradual allocation pace cannot immediately offset concentrated whale and speculative selling.
In summary, the short-term decoupling of ETF inflows and token prices is the result of speculative washout, macro headwinds, and lagging institutional capital deployment. However, this does not mean the positive impact is invalid; rather, it reminds investors that ETF value must be sought from a longer-term perspective and within institutional allocation structures.
- Long-term Value: Institutional Allocation and Sustained Capital Inflows
Since short-term price performance is influenced by external factors, the value of ETFs must be examined from two core dimensions: the sustainability of institutional capital inflows and the differentiated competitive advantages of the assets themselves.
This value is first reflected in the changing attitudes of traditional financial giants. One of the world’s largest asset managers, Vanguard Group, which had previously maintained a conservative stance toward crypto assets, announced it would open up Bitcoin ETF trading. For years, its executives believed cryptocurrencies lacked intrinsic value—neither generating cash flow nor suitable for long-term retirement strategies—viewing digital assets as speculative tools rather than core portfolio holdings. The company had refused to offer Bitcoin ETFs after their January 2024 launch, even restricting clients from purchasing competitors’ funds.
Now, Vanguard allows investors to trade BlackRock’s spot Bitcoin ETF, shifting from critic to distributor. This move clearly signals to the market that ETFs, as compliant investment instruments, have broken through the final major barrier in traditional finance.
Indeed, despite plunging prices, institutions remain steadfast in their allocation intentions. For example, SOL and HBAR ETFs have seen net inflows for five consecutive weeks; the Canary XRP ETF’s total net asset value has reached $355 million, while Bitwise and Grayscale’s ETFs each have about $200 million in net assets. This ongoing, substantial capital accumulation is a key indicator of the long-term benefits of ETFs. Analysts estimate that even at a fraction of Bitcoin’s scale, altcoin ETFs could attract $10 billion to $20 billion in capital inflows by mid-2026.
Within institutional allocation strategies, assets’ differentiated competitive advantages are also key. For example, Solana’s staking ETF offers yields of up to 7%, and XRP has payment-focused funds. Such products may attract investors seeking diversification or passive income. Grayscale’s Head of Research, Zach Pandl, has stated that Solana ETFs could absorb at least 5% of Solana’s total token supply within one to two years.
However, this optimism faces strong challenges from market giants. BlackRock, the world’s largest asset manager, remains highly cautious and negative toward altcoin ETFs. BlackRock’s Head of Digital Assets, Robert Mitchnick, said most altcoins are worthless and emphasized the risks of investing in a wide range of immature digital assets, which is why they focus on mature cryptocurrencies like Bitcoin and Ethereum. Bloomberg ETF analyst Eric Balchunas supports this view, stating it explains BlackRock’s reluctance to diversify its portfolio.
This caution brings potential risks. K33 Research notes that without BlackRock’s participation, total capital inflows into altcoin ETFs could decrease by 50% to 70%. Meanwhile, CryptoQuant’s CEO warns that altcoin liquidity is rapidly declining, and only projects able to open new liquidity channels (especially via ETFs) will survive in the market.
Additionally, the experience of the LTC spot ETF is a cautionary tale: since its launch, there have been several consecutive trading days with zero net inflows. CoinShares, one of Europe’s largest digital asset managers, also formally withdrew its SEC filings for XRP, Solana Staking, and Litecoin ETFs, proving that even large asset managers remain wary of single-asset ETFs with fierce competition and limited profits.
CoinShares CEO Jean-Marie Mognetti stated that, given the dominance of traditional financial giants in the single-asset crypto ETF market, the company will redirect resources over the next 12-18 months to more innovative and higher-margin products.
Conclusion
Institutional divergence precisely demonstrates that the era of crypto asset ETFs is entering a new phase of layered allocation. On one hand, Vanguard’s opening of Bitcoin ETF trading symbolizes mainstream finance’s final acceptance of the crypto market; on the other, CoinShares’ withdrawal of applications and BlackRock’s caution toward altcoins reveal institutional vigilance regarding underlying asset quality and sector competition.
Overall, ETF approval is fundamentally and in the long term an important positive factor. Short-term price declines do not mean this benefit has failed, but rather that its realization is being distorted by short-term market forces.
Click to learn more about ChainCatcher job openings.
