Bitfinex analysts have stated that a sustained altcoin season will not occur until the U.S. Securities and Exchange Commission (SEC) approves a wave of altcoin-focused exchange-traded funds (ETFs), contrasting with Coinbase Institutional's view that conditions are ripe for an altcoin breakout as early as September.
Bitcoin's market dominance has declined by 6% over the past month, a traditional signal that often precedes altcoin rallies. However, Bitfinex argues that without institutional products like ETFs, capital rotation into altcoins remains speculative and fragile. They emphasize that ETFs would create "sustained, price-agnostic demand" necessary for a broad market re-rating.
The SEC is currently reviewing over 70 crypto ETF applications, with analysts Eric Balchunas and James Seyffart expecting approvals by the end of 2025. Solana (SOL), XRP, and Litecoin (LTC) are seen as frontrunners. The first U.S. staking-enabled ETF, the REX-Osprey Solana Staking ETF (SSK), has already launched, but decisions on major applications from firms like 21Shares, Bitwise, and BlackRock have been delayed.
REX Financial CEO Greg King advised ETF issuers to focus on quality assets like Solana and established meme coins rather than flooding the market with weak funds. Meanwhile, venture capitalist Tim Draper suggested that altcoins act as innovation test beds that ultimately strengthen Bitcoin, though developer activity data shows Ethereum and other altcoins significantly outpace Bitcoin in developer engagement.