What They Mean for Solana and Other Altcoins

The recent approval of the ETH ETF has been said to cause a massive revolution among altcoins with L2 and DeFi OGs expected to rally.

However, projects labelled as “Ethereum killers” would be left behind in the post-ETH ETF environment.

The recent approval of Ether Exchange Traded Funds (ETFs) triggered a short-term rally, forcing Bitcoin up into the $70k zone and Solana back into the $180 region. However, several external factors highlighted by Crypto News Flash have flipped over market sentiments against bullish continuation, causing the assets to stabilize just below critical resistance levels. Interestingly, analysts believe that the approval of S-1 registration statements would trigger another rally to set new all-time high prices.

With that happening, altcoins would certainly dominate the market as witnessed when Bloomberg analysts revised their approval chance from 25% to 75%. At that time, ETH soared by 20% to top $3,800, underscoring the relevance of this development to Decentralized Finance (DeFi) compared to the spot Bitcoin ETF approval. To analysts, the BTC ETF approval sealed its status as an institutional asset, however, the ETH ETF would legitimize altcoins and set them up for new highs in the next bull market. Beyond that, an analyst expects this greenlight to trigger an L2 and DeFi OG rally.

To support this point, it can be recalled that Ethereum layer-2s including Optimism and Arbitrum recorded similar price moves as ETH when the market bounced back after the related ETF approval. Expectedly, DeFi OGs like Uniswap or Aave had similar price moves, recording high double-digit percentage price increases due to their direct ties to EVM technology.

More Impact of the ETH ETFs on Altcoins

Also, the complete takeoff of the Ether ETFs is expected to impact EVM-compatible projects. This implies that Avalanche and Polygon stand a better chance than Algorand in the next bull run. The reason is that EVM compatibility would become a more crucial subject than it has ever been in the previous years considering the fact that ETH has gained some form of regulatory clarity, generating hype around the project.

In addition to the above category, the decentralized exchanges (DEXs) and lending protocols would be opened for mainstream adoption due to the simplicity and flexibility unlocked by the Ether ETFs. According to analysts, the projects that provide the most functional utility would benefit the most. This creates a huge potential around DEXs like SushiSwap or Balancer and borrowing/lending protocols, like Aave and Compound.

Unfortunately for Ethereum competitors like Solana, analysts believe that they would experience a huge struggle in the post-ETH ETF environment. Regardless, Solana would still hit some all-time highs since the spot ETH ETF has created the needed clarity for decentralized blockchains.

For technological developments like zero-knowledge proofs which power many Ethereum layer 2s and Real-World Asset (RWA) tokenization experiments, there would be a massive revolution for them. According to analysts, the approval of the ETH ETF would make more projects build on Ethereum with some transitioning from L1s to Ethereum rollups. Amid all these, investors have been advised to do their research before investing in any project. On top of that, they need to avoid getting caught up in excitement and momentum when the market stages a bull run.

At press time, ETH was trading at $3,827 after declining by 1.78% in the last 24 hours.