Over the past few months, an interesting phenomenon has been occurring in the cryptocurrency market. While altcoin spot ETFs are being approved for listing one after another, the prices of related coins are generally declining. This is truly a strange situation.

First, as a background, regulatory standards were significantly relaxed following SEC approval in September 2025. While Bitcoin spot ETFs took nearly ten years to get approved, altcoins like Solana, XRP, Dogecoin, Litecoin, and Hedera reached listing in less than six months. The simple condition is that an ETF with a trading history of over six months in the futures market under CFTC regulation and holding at least 40% of assets is available.

Now, here’s where it gets interesting. According to data from Coinglass, as of mid-November, the total net inflow into major altcoin ETFs has reached about $700 million. The Solana ETF alone recorded net inflows for 20 consecutive days, totaling $568 million. The XRP ETF also exceeded a total of $587 million. Funds are definitely flowing in.

Yet, prices are not rising. In fact, they are falling. Taking XRP as an example, shortly after the Bitwise XRP ETF was listed, it dropped about 7.6%, with a temporary decline exceeding 18%. This trend is seen across the entire altcoin market.

Why is this happening? It’s a classic “buy on expectations, sell on facts” pattern. Speculative capital preemptively buys during the anticipation phase of ETF approval, then takes profits and sells once good news materializes, creating selling pressure. Short-term selling pressure offsets the inflow of funds.

Additionally, macro factors are involved. Strong employment data weakens expectations of interest rate cuts and suppresses overall risk asset performance. As Bitcoin fell from an early high of $126k to around $80k, the entire altcoin market is under downward pressure.

Structural issues are also emerging. Lack of liquidity and market depth are core problems. According to Kaiko data, Bitcoin’s 1% market depth is $535 million, while most altcoins are only a fraction of that. Even with the same amount of capital inflow, the impact on altcoin prices should be greater than on Bitcoin, but the current “fact-based selling” phenomenon is masking this. Moreover, many altcoins suffer from low liquidity, increasing the risk of price manipulation, which directly affects ETF net asset value calculations and raises regulatory concerns.

However, in the long term, there are structural positive factors. The emergence of these ETFs essentially confirms the “non-security” status of altcoins from a legal perspective and provides an entry point for compliant fiat currency. From an institutional portfolio construction standpoint, ETF adoption will lead to sustained passive buying of these altcoins.

While speculators are retreating, institutional portfolio funds are beginning to enter, forming a higher long-term bottom for these altcoins.

Another noteworthy point is the ongoing market stratification. ETFs for assets like BTC, ETH, SOL, XRP, and DOGE form the first group, enjoying a “compliance premium” that allows registered investment advisors and pension funds to include them without obstacles. Meanwhile, non-ETF assets remain in the second group, relying on retail investor funds and on-chain liquidity.

Innovative efforts are also underway. Bitwise’s Solana ETF aims to distribute on-chain revenue to investors through staking mechanisms. The SEC has long regarded staking services as securities issuance, but Bitwise explicitly states “Staking ETF” in its S-1 filing, attempting to design a compliant structure. If successful, it could offer cash flows similar to dividends, unlike the non-yielding Bitcoin ETF.

This movement will not stop. Over the next 6 to 12 months, more assets like Avalanche and Chainlink are likely to follow this ETF model. The BNB ETF is seen as the ultimate test of the new SEC leadership’s regulatory stance.

Currently, Litecoin ETF’s daily net inflow is only a few hundred thousand dollars, with some days seeing no inflow at all. The HBAR ETF also saw about 60% of its initial weekly inflow concentrated, but subsequent net inflows have clearly decreased.

The once speculative, story-driven market is irreversibly evolving into a new order centered on compliance channels and institutional portfolio building. The concentrated listing of altcoin spot ETFs is just the beginning of this transformation. Short-term price fluctuations may be concerning, but looking at the broader structural shift, the phenomenon of altcoins not rising can be seen as a temporary adjustment phase.