A U.S. government shutdown is delaying Securities and Exchange Commission approvals for exchange-traded funds based on altcoins like Dogecoin and Solana. Cryptocurrencies have fallen amid investor anticipation for these products, following the success of Bitcoin ETFs. Experts predict potential price boosts but warn of investment risks.
Cryptocurrencies experienced a dip recently, with Bitcoin trading at around $111,000 after reaching an all-time high of $126,000 earlier this month. A flash crash further impacted altcoins, such as Dogecoin and Solana, which are lesser-known alternatives to Bitcoin.
These altcoins are on the cusp of mainstream integration through exchange-traded funds (ETFs), which allow easy investment via brokerage accounts like Charles Schwab or Robinhood without direct blockchain interaction. The SEC approved the first Bitcoin ETFs early last year, attracting about $50 billion in inflows within the first year. "Bitcoin ETFs saw around $50 billion in aggregate in inflows, just in the first year," said Zach Pandl, head of research at Grayscale. "So these were one of the most successful ETF launches of all time."
Since the crypto-friendly Trump administration took office, applications for altcoin ETFs have surged, with over 130 pending according to Bloomberg Intelligence. However, the ongoing government shutdown has halted the approval process. "The government shutdown has delayed the approval of a variety of altcoin ETFs," Pandl noted. "And we hope that that process can pick right back up as soon as the government reopens."
Professional investor Glauber Contessoto, who made his first million from Dogecoin, remains optimistic. Despite losses of $312,000 to $330,000 on Dogecoin over the past week, he said, "That would be really bullish for Dogecoin. It would be on news headlines, we would probably see a pump on the price."
Duke University researcher Lee Reiners cautions against overconfidence. "Just because it's in a familiar wrapper—in this case, an ETF—does not mean that it is somehow safe or cannot go down significantly," he said. While altcoin ETFs are unlikely to disrupt broader markets, they may lead some investors to buy unfamiliar assets.