Grayscale’s Brave New Bid for a Bitcoin ETF Could Blur the Booming Altcoin Market’s Future

In a significant game-changer pinging across the cryptocurrency universe, institutional asset manager Grayscale today filed registration statements with the U.S. Securities and Exchange Commission (SEC) related to three exchange-traded funds (ETFs) — for Litecoin (LTC), Hedera (HBAR), and Bitcoin Cash (BCH). This is potentially a game-changer for altcoin investors, as regulated spot ETFs could democratize access to these digital assets, invite billions of institutional dollars, and accelerate mainstream adoption. As the crypto world grows and moves quickly with innovative regulatory developments, this filing demonstrates why altcoin ETFs matter more than ever today — giving investors an easier and safer way to play the volatile yet promising field of crypto beyond Bitcoin and Ethereum, without having to hold or learn about the underlying coins themselves.

Historical Context

For some time, Grayscale Investments has played a crucial role as the bridge between traditional finance and crypto, pioneering the world of crypto investment products. The firm was established in 2013 and launched its flagship product, the Grayscale Bitcoin Trust (GBTC), in 2015, giving investors one of the first investment vehicles for indirect exposure to Bitcoin without owning the cryptocurrency. The Grayscale Ethereum Trust came next in 2017, and both represent significant benchmarks in the adoption of digital assets by institutions. As of 2023, Grayscale oversaw over $40 billion AUM in its trusts, but they were closed-end funds that traded at premiums or discounts to their net asset value.

 

The first major turning point was in January 2024, when the SEC approved the conversion of GBTC to a spot Bitcoin ETF after competitors such as BlackRock and Fidelity had filed their own applications. This greenlight — following years of denials, court fights, and Grayscale’s victorious lawsuit against the SEC in 2023 — opened the floodgates to $20 billion-plus coming into spot Bitcoin ETFs in their first year. Spot Ethereum ETFs soon joined them in July 2024, bringing crypto into the mainstream of asset classes. These events have historically been closely linked to price increases: Bitcoin shot up over 150% following ETF approval, while Ether jumped over 60%. Grayscale’s latest altcoin ETF filings add to this legacy, seeking to convert existing trusts for LTC and BCH and establish a new one for HBAR, reflecting the firm’s strategy of expanding crypto distribution to retail and institutional investors.

Current Data

On September 10, 2025, Bitcoin and the broader crypto market displayed robust gains, though overall market strength is tempered by current economic uncertainty.

• Litecoin (LTC): ~$112.86, market cap $8.5B, $525M daily volume
• Hedera (HBAR): $0.22 per coin, market cap $9.78B, $243M daily volume, strong enterprise adoption in dApps
• Bitcoin Cash (BCH): $598.07, market cap $11.72B, very strong liquidity

 

Recent developments point to renewed altcoin activity: LTC is up 10% over the past week on ETF chatter, HBAR is up 25% YTD on supply chain and DeFi adoption of hashgraph tech, and BCH has seen a 15% increase in trading volume. In aggregate, the altcoin market cap has surpassed $1.2 trillion in 2025, a 40% increase over 2024, as institutional interest flourishes on the heels of Bitcoin and Ethereum ETF launches. Grayscale’s filings come at a time when more than 92 altcoin ETFs are awaiting SEC review, which could bring $5–8 billion in inflows by year-end if approved.

Inference

These filings carry massive financial and market implications and may redefine how investors, regulators, and companies interact with altcoins. For investors, spot ETFs of this kind would represent a way to gain exposure to LTC, HBAR, and BCH without worrying about wallets, managing holdings, or exchange risk — sure to draw traditional portfolios seeking diversification. Analysts say approval could add $2–3 billion to each asset shortly, matching the $20 billion that flowed into Bitcoin ETPs — potentially pushing prices 20–50% higher based on historical patterns. This is especially important for BCH, as Grayscale's proposal would be the first ETF for this asset, effectively giving it legitimacy for commerce and increasing liquidity.

 

Regulators still have a tightrope to walk. The SEC’s decision to delay HBAR in November 2025 reflects caution amid fears of market manipulation, but approvals could create precedents for wider crypto integration, with listings on NYSE Arca and custody handled by major players like Coinbase. For companies — especially in DeFi and enterprise blockchain (e.g., Hedera’s hashgraph tech) — ETFs could drive adoption by putting real capital into production use cases and could increase transaction volumes by 30–50% or more. However, risks remain: volatility could spike if approvals are denied, and competition from companies like Canary and Bitwise could fragment inflows. Overall, this represents crypto market maturation, shrinking Grayscale trust premiums and creating a more efficient market — though it may not necessarily trigger a “traditional altseason,” given institutional preference for blue-chip assets.

Future Outlook

Industry experts remain optimistic about Grayscale’s altcoin ETFs. Bloomberg analysts assign a 95% approval probability for an LTC ETF by early 2026 due to its low-risk profile and multiple issuer filings already in the pipeline. HBAR could rally to $0.27 following approval, based on its enterprise focus, while BCH could target $700–800 if its ETF — the first of its kind — is approved. The HBAR and other competing proposals (such as those by Bitwise and Canary) are noteworthy but less impactful. If approvals arrive after the November 2025 deadlines, they could unlock $5–8B in subscriptions and propel the total altcoin market cap toward $1.5T by mid-2026.

 

Proponents, including BlackRock executives, argue that such ETFs will bring greater liquidity and regulatory clarity, enabling tokenized assets and hyper-liquid markets. However, the SEC’s scrutiny of “no-utility” assets (e.g., memecoins) suggests a selective approval process. Should Grayscale succeed, the firm’s efforts could unleash a wave of altcoin-based ETFs, drive crypto adoption, and place digital assets firmly into long-term investor portfolios — aligning with forecasts of a $100 trillion global digital asset market by 2030.

 

This article is contributed by an external writer: Caleb Obed.
 

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