Insights on Crypto ETF Developments from Bloomberg’s Seyffart: Analyzing the Landscape

Asset manager Bitwise is optimistic about cryptocurrency exchange-traded funds (ETFs), believing they will seize over 100% of the new supply of Bitcoin, Ethereum, and Solana. While Bloomberg's ETF specialist, James Seyffart, aligns with this perspective, he warns that many individual altcoin ETFs might face liquidation during a prolonged bearish market. Seyffart also notes a rise in crypto index ETFs, which could provide a better investment strategy compared to single altcoin ETFs.

Key Takeaways

Bitwise forecasts substantial growth for crypto ETFs, projecting them to capture more than 100% of new Bitcoin, Ethereum, and Solana supply.
Seyffart suggests that many altcoin ETFs could be liquidated if the market enters a deeper downturn.
Crypto index ETFs that track a mix of assets may offer a more balanced investment approach, especially for low-market-cap cryptocurrencies.
Recent performances show disparities among altcoins, with Cardano (ADA) facing significant losses despite increasing interest in cryptocurrencies.
Institutional interest is rising, particularly for XRP, but market sentiment remains a critical factor influencing price movements.

As we move further into 2025, asset manager Bitwise has shown strong optimism regarding crypto ETFs, predicting they will absorb more than 100% of the new supply of key cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). The firm pointed to historical demand for ETFs, suggesting that upcoming altcoin ETFs might attract similar interest.

James Seyffart, an ETF analyst at Bloomberg, shares this optimistic view but cautions that most individual altcoin ETFs could see liquidation if the market experiences a more severe downturn. He commented, "I also think we’re going to see a lot of liquidations in crypto ETP products. Might happen at the tail end of 2026 but likely by the end of 2027." Seyffart adds that there are over 126 filings for these products, indicating a significant push in the market.

Crypto Assets and ETF Trends

Source: Bloomberg

Currently, major cryptocurrencies including BTC, ETH, SOL, and XRP have drawn notable ETF inflows and are poised to sustain their status as leading digital assets. However, lesser-known altcoins with lower market capitalization could face challenges, potentially leading to substantial liquidations if their prices decline.

The Potential of Crypto Index ETFs

Seyffart suggests that crypto index ETFs, which track a collection of altcoins along with BTC, might be a smarter investment option compared to seeking out individual altcoin ETFs, particularly for low-market-cap cryptocurrencies. He explained, "One category I’m expecting to garner a lot of assets is Crypto index ETPs. They are going to come in a lot of shapes and sizes."

Crypto Index ETFs

Source: Bloomberg

At the moment, there are six crypto index ETFs available. Among altcoins beyond ETH, SOL, and XRP, the cryptocurrency Cardano (ADA) consistently appears across various products. While these index products allow for broader exposure to multiple digital assets, their immediate effect on market prices seems limited, based on recent statistics. For instance, ADA experienced a 56% downturn in 2025, considerably higher than XRP’s 36% decline and SOL’s 20% slide.

Performance Comparison of Altcoins

Source: Performance comparison of ADA, SOL, and XRP (TradingView)

This data reinforces Seyffart’s apprehension that a single altcoin ETF, particularly those connected to smaller market capitalization assets, might suffer more severely and contribute to heightened ETF liquidations. On a positive note, the U.S. spot XRP ETF has successfully attracted over $1 billion in cumulative inflows within just two months of its launch. In comparison, SOL ETFs received $725 million in cumulative inflows and had been introduced a month earlier. This trend highlights a stronger institutional appetite for XRP than for SOL.

However, despite this institutional backing, XRP has struggled to maintain a price above $2 and has experienced larger price drops than SOL. This illustrates that while institutional adoption is vital, overall market sentiment plays a significant role in determining price fluctuations.

Concluding Thoughts

As the landscape of cryptocurrency ETFs evolves, it will be interesting to observe how institutional interest continues to shape market dynamics and which assets emerge as the future leaders within this space.