Bloomberg Analyst: Approval of Altcoin ETFs Unlikely to Ignite Traditional Alt Season

Bloomberg ETF analyst James Seyffart stated that the upcoming approval of multiple altcoin ETFs may attract market attention, but it is unlikely to replicate the institutional capital frenzy triggered by the Bitcoin ETF, and it will be even more difficult to reproduce the comprehensive bullish trend of the “alt season” seen in past bull runs.

The current alt season is different from before

During an interview with Milk Road on September 4, Seyffart pointed out that the current market resembles a peak season for Digital Asset Financial Companies (DATCO) rather than a traditional alt season.

He emphasized that these digital asset trading companies have reported astonishing returns recently, but the performance of a single altcoin is still relatively sluggish compared to previous years.

ETF Approval List and Potential New Assets

According to the new framework from the U.S. Securities and Exchange Commission (SEC), the first approved altcoin ETFs may cover Dogecoin (DOGE), Chainlink (LINK), Stellar (XLM), Bitcoin Cash (BCH), Avalanche (AVAX), Litecoin (LTC), Shiba Inu (SHIB), Polkadot (DOT), Solana (SOL), and Hedera (HBAR).

In the future, if futures contracts are traded continuously for six months on CFTC regulated exchanges, tokens like Cardano (ADA) and XRP are also expected to qualify.

However, Seyffart believes that the market response to these products will be far less than that of the Bitcoin ETF: “Will it be sought after like the Bitcoin ETF? I absolutely do not think so.”

Institutions Favor More Diversified Allocations

Seyffart expects that institutional investors are more inclined to hold multi-asset crypto basket ETFs rather than single altcoin products. Currently, Grayscale and Bitwise's multi-asset crypto ETFs have received preliminary technical approval, but are still awaiting final clearance from the SEC.

Bitwise products cover 10 types of crypto assets, while Grayscale products are weighted by market capitalization across 5 major cryptocurrencies. He pointed out that investment advisors generally prefer to diversify risk rather than concentrate bets on a single high-volatility token.

Structural Shift: Capital Flows into Regulated Products

Seyffart believes that the current market is becoming increasingly institutionalized, with mature traditional financial participants acquiring cryptocurrency risks through regulated ETFs and stock market instruments, rather than directly purchasing tokens.

This structural change signifies that the historically driven “alt season” model, led by retail investors and high-risk capital, may have been permanently rewritten.

The case of Ethereum ETF is a microcosm: although there was a massive influx of funds in the early stages, it did not lead to a widespread increase in the overall altcoin market, indicating that institutions prefer to allocate to mature assets rather than speculative alternatives.

Conclusion

With the launch of altcoin ETFs, the market may welcome more diversified investment options, but Bloomberg analyst Seyffart's viewpoint reminds investors that the traditional “alt season” may be a thing of the past. The future market rhythm will be more dominated by institutional funds and regulated products, rather than solely relying on retail speculation and the influx of high-risk capital.