Key Points
- Bitcoin ETFs face a downturn with net inflows nearly wiped out in 2025.
- Asset managers are pushing for altcoin ETFs with Litecoin, XRP, Solana, and Dogecoin as top contenders.
The cryptocurrency market has recently been under pressure, with Exchange-Traded Funds (ETFs), particularly those of Bitcoin, struggling the most.
The Struggles of Bitcoin ETFs
The U.S. spot Bitcoin ETF market has seen a significant decrease, with net inflows finding it hard to gain traction. Only five days of positive inflows were recorded in February, while March has seen just one. Consequently, total net inflows since the beginning of 2025 have almost been wiped out, with fund values falling nearly 25% from their peak in late January.
According to SoSoValue data, the cumulative net inflows are currently at $35.20 billion, just slightly above the $35.00 billion recorded on the first trading day of the year. This downturn is a reflection of Bitcoin’s price struggles, raising concerns about investor sentiment in the ETF space.
Community Reactions and Altcoin ETFs
Despite a minor recovery in the total value of assets under management (AUM) for Bitcoin ETFs, the underlying trend remains worrying. A recent 10% increase in Bitcoin’s price has contributed to this uptick, but it doesn’t hide the persistent net-negative outflows recorded in recent weeks.
On the 11th of March, Bitcoin ETFs experienced net withdrawals of $371 million, marking the seventh consecutive day of capital outflows. This downward trend extended to Ethereum ETFs, which registered $21.57 million in net outflows for five straight days.
As Bitcoin ETFs face increasing challenges, the focus is shifting towards alternative cryptocurrency funds. Reports suggest a growing number of asset managers are racing to introduce the first altcoin ETFs, aiming to diversify the market beyond Bitcoin.
Proposed funds include holdings in assets such as Polkadot, Axelar, and Avalanche, reflecting a broader interest in expanding institutional investment options. However, analysts suggest that Litecoin, Ripple, Solana, and Dogecoin ETFs are the most likely contenders for regulatory approval.
If approved, these funds could inject fresh momentum into the crypto investment landscape, potentially reshaping market dynamics amid Bitcoin’s ongoing struggles.
