The perpetual financial rollercoaster otherwise known as crypto has taken another dip. Bitcoin is well off the all-time high of $126,000 it reached earlier this month and is now trading at around $111,000.
A recent crypto flash crash spelled even more turmoil for so-called “altcoins,” the less famous non-bitcoin cryptocurrencies, like Dogecoin or Solana.
Thing is, even if you haven’t heard of them yet, those altcoins are poised to take a step into the financial mainstream.
Glauber Contessoto has had better weeks. “OK, over the last week, I am down $312,000 — no, $330,000 — on Dogecoin specifically,” he said.
Contessoto is a professional crypto investor. He made his first million by pouring his life savings into Dogecoin, a cryptocurrency based on an internet dog meme.
But Dogecoin has spiked and tumbled and spiked before, and Contessoto thinks there’s a reason for another spike coming soon: Dogecoin ETFs.
“That would be really bullish for Dogecoin,” he said. It would be on news headlines, we would probably see a pump on the price.”
ETF stands for exchange-traded fund. You can think of them as an easy way to invest in crypto from the comfort of your Charles Schwab or Robinhood account — no interaction with the blockchain required.
The SEC approved the very first crypto ETFs early last year for Bitcoin.
“Bitcoin ETFs saw around $50 billion in aggregate in inflows, just in the first year,” said Zach Pandl, head of research at Grayscale, a crypto asset manager. “So these were one of the most successful ETF launches of all time.”
Since the crypto-friendly Trump administration took over, applications for altcoin ETFs have surged. Over 130 are right now waiting for SEC approval, according to Bloomberg Intelligence — although they may be waiting a bit longer than expected.
“The government shutdown has delayed the approval of a variety of altcoin ETFs,” Pandl said. “And we hope that that process can pick right back up as soon as the government reopens.”
Assuming the government does re-open, individual investors may soon have new crypto options in their brokerage accounts or 401(k)s.
Duke University crypto researcher Lee Reiners, however, worries that altcoin ETFs may give investors a false sense of security.
“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.
Reiners doesn’t expect altcoin ETFs to cause broader financial market chaos, but he does think some people may invest in things they don’t really understand.