Altcoins Surge Amid ETF Optimism
Alternative cryptocurrencies, commonly known as altcoins, experienced a notable upswing on Friday, primarily driven by the optimistic sentiment surrounding spot Exchange-Traded Funds (ETFs) for XRP and Dogecoin (DOGE). Additionally, the JUP token from Solana-based decentralized exchange Jupiter gained traction, buoyed by the platform’s newly announced buyback program.
The U.S. Securities and Exchange Commission (SEC) has officially acknowledged Grayscale’s applications for spot ETFs involving both XRP and Dogecoin, as per updates from February 13. These applications are now set to be submitted to the SEC’s federal register, triggering a 240-day timeline for the agency to conduct a review and render a decision on these proposals.
In recent times, there has been a surge in ETF filings for various altcoins, including Solana’s SOL and Litecoin (LTC). This trend suggests a growing anticipation for the accelerated integration of cryptocurrencies into mainstream finance, particularly with the potential influence of Donald Trump’s administration.
The anticipated approval of spot ETFs for XRP and DOGE, which are regulated investment vehicles, would significantly simplify the process for institutions to gain exposure to these cryptocurrencies without the complexities associated with direct purchasing and storage. This facilitation could enhance market liquidity and drive up demand for these digital assets.
As of the latest reports, XRP traded at $2.73, marking a remarkable increase of 10% within a 24-hour period, positioning it as the top performer among the 100 largest cryptocurrencies by market capitalization. On the other hand, DOGE also saw a 4% rise, according to data from CoinDesk and Coingecko.
“The SEC’s acceptance of ETF applications for XRP and Dogecoin is a significant milestone, contributing to an expanding roster of altcoin ETF evaluations, including those for Solana and Litecoin. If these products receive approval, they could substantially enhance institutional access to altcoins, injecting much-needed liquidity into the market and possibly laying the groundwork for an altcoin season later this year,” stated Valentin Fournier, an analyst at BRN, in an email to CoinDesk. He further added, “Digital assets are currently experiencing a slight upward momentum, bolstered by positive regulatory signals and a reduction in trade tensions.”
In a parallel development, Jupiter’s JUP token surged by 10%, driven by the decentralized exchange’s initiative to allocate 50% of its protocol fees towards the repurchase and locking of JUP tokens for a duration of three years starting February 17. This strategic plan aims to decrease the circulating supply of the token and enhance the sustainability of the platform.
On the other hand, Bitcoin (BTC) has been trading in a somewhat lackluster manner, hovering around $97,000 amidst ongoing outflows from U.S.-listed spot ETFs. The eleven spot Bitcoin ETFs in the U.S. have collectively witnessed a net outflow of $650 million this week, as reported by Farisde Investors.
Nevertheless, this subdued price action offers a glimmer of hope against the backdrop of higher-than-expected U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) releases this week. “Given Bitcoin’s remarkable resilience amidst rising inflation and a more favorable regulatory environment, this accumulation phase could potentially lead to a significant rally in the upcoming weeks. We maintain a bullish outlook and advise investors to sustain heavy exposure to digital assets, strategically balancing their holdings between BTC and ETH based on market capitalization,” Fournier concluded.
