Whether there is still a bull market for altcoins has been a topic of discussion in the industry for the past six months.
On the one hand, VC funds are large, and the entry of new retail investors is less than expected. It is difficult for funds to take over new coins and old tokens that are still alive in the market, resulting in the increase in project valuations in the primary market, and high FDV and low circulation after the tokens are launched.
Secondly, due to the saturation of applications in the last round of bull market, the block space is "overloaded". VC's capital deployment during the bear market is mainly concentrated in the infrastructure field, which makes the application layer, which is most perceived by users, lag behind in development, and presents the problem of "narrative poverty" when the market suddenly ushered in the market. But in the final analysis, what everyone is most worried about is that the money coming in from Bitcoin ETFs will not flow into altcoins. In the last cycle, crypto institutions mortgaged BTC, leveraged, and then these leveraged funds flowed to the altcoin market, thereby promoting the growth of the overall crypto market value and bringing about the so-called altcoin bull market.
But the logic has obviously changed in this cycle. Spot ETFs are managed by custodians and cannot be leveraged, which directly kills an important source of funds for the altcoin market. However, the new trends of ETH and SOL spot ETFs this month have brought newer and clearer logic to attract and create liquidity for the crypto industry. ETF funds will not only be enjoyed by Bitcoin, but also by altcoins. But the next question is, will consumers in the capital market pay for crypto assets other than Bitcoin? In the short term, it may be difficult. The world's general perception of cryptocurrency is still Bitcoin. It will take some time to digest the concepts of smart contracts, the difference between Ethereum and Solana, but this is exactly where the business opportunities for institutions such as BlackRock lie (packaged crypto index). In contrast, the entry of traditional institutions may lead to the gradual squeezing of the market of many crypto-native institutions, especially market makers and OTC (over-the-counter transactions). The regular army can bring funds, but it can also steal your job. In short, regardless of whether SOL ETF passes or not, and how ETH and ETF perform in the future, the logic and trend of the ETF bull market seem to be unstoppable.
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