Bitcoin News Today: Regulators Spur Altcoin Surge via Derivative-Backed ETFs

Dogecoin (DOGE) is leading a broad-based rally in altcoins, with XRP, Tron (TRON), and Solana (SOL) also experiencing gains. This surge is being driven by regulatory developments in the U.S. and growing institutional interest. The first Dogecoin exchange-traded fund (ETF), DOJE, is set to launch soon, following a structure similar to the recent successful Solana staking ETF. Unlike spot ETFs, which directly hold the underlying cryptocurrency, DOJE will offer exposure via derivatives such as futures and swaps, a 40-Act framework designed to sidestep regulatory hurdles. This approach was previously used by Rex Shares and Osprey Funds for their Solana product and is now being extended to Dogecoin.

The launch of DOJE is part of a broader wave of altcoin ETF applications being reviewed by the U.S. Securities and Exchange Commission (SEC). Firms like Grayscale, Bitwise, and 21Shares are also seeking approval for Dogecoin-based products, while similar applications for XRP, Solana, and Litecoin are in the pipeline. Analysts such as Eric Balchunas of Bloomberg have indicated a high likelihood of approval for major altcoins, particularly given the precedent set by the successful Bitcoin and Ethereum ETFs. The approval of those products led to massive inflows of institutional capital—$2 billion in the first three days of trading—catalyzing record highs for both cryptocurrencies.

This pattern of ETF-driven momentum is now extending to altcoins. Digital Asset Treasury Companies (DATCOs) have been central to this trend, with institutional investors allocating funds to Ethereum, Binance Coin (BNB), and other altcoins. For instance, Tom Lee’s Bitmine recently added $167 million in Ethereum, while Nasdaq-listed BNB Network Company increased its BNB holdings by $33 million. Such movements signal a shift in capital from Bitcoin to smaller, high-risk tokens, a hallmark of what Bloomberg ETF analyst James Seyffart has called “altcoin season.”

The broader market indicators also support this shift. Bitcoin dominance, a measure of Bitcoin’s share of the total crypto market, has fallen from a peak of 65% to 58%, indicating increased activity in altcoins. Historically, altcoin seasons have occurred when Bitcoin dominance dips below 40%, often resulting in explosive price moves. With current market conditions resembling past cycles, investors are closely watching whether this trend continues. The TOTAL3 index, which excludes Bitcoin and Ethereum from total market capitalization, is approaching a key resistance level of $1.15 trillion. A breakout above this level could signal further gains for altcoins in the coming months.

Meanwhile, individual altcoins are showing strong performance. MemeCore (M), Story (IP), Pump.fun (PUMP), Sky Protocol (SKY), and Polkadot (POL) are among the top performers, with weekly gains exceeding 14% in some cases. These gains are occurring even as Bitcoin’s price remains relatively flat and Ethereum declines slightly. Technical indicators for these altcoins, including rising RSI and MACD readings, suggest continued upward momentum in the near term, barring a reversal in broader market sentiment.

The altcoin rally is not without its challenges. For example, recent tensions between key stakeholders in the crypto space have raised concerns about governance and investor confidence. Justin Sun, one of the major investors in World Liberty Financial—a crypto project associated with Donald Trump—recently had 595 million of his WLFI tokens blacklisted. Sun has criticized the move as a violation of investor trust, calling for the tokens to be unlocked. While this incident highlights the risks involved in altcoin investing, it has not dampened the broader upward trend, as institutional and corporate capital continue to flow into the sector.

As the regulatory and market environment evolves, altcoins are increasingly being viewed as viable assets for diversified investment portfolios. Analysts predict that multi-asset ETFs—products that combine exposure to several cryptocurrencies—could attract significant institutional interest in 2025, even if single-token products do not match the scale of Bitcoin ETFs. This diversification strategy is seen as a way to mitigate risk while capturing growth in high-performing altcoins.

Source:

[1] First Dogecoin ETF set to launch — but it's a different breed ... (https://finance.yahoo.com/news/first-dogecoin-etf-set-launch-151036858.html)

[2] Dogecoin may see first-ever ETF launch next week: Analyst (https://cointelegraph.com/news/dogecoin-etf-united-states-launch-next-week-analyst)

[3] Top Trump crypto backer Justin Sun says his World Liberty ... (https://www.reuters.com/business/finance/top-trump-crypto-backer-justin-sun-says-his-world-liberty-tokens-unreasonably-2025-09-05/)

[4] World Liberty Financial Blacklists Justin Sun's Address ... (https://www.coindesk.com/tech/2025/09/04/world-liberty-financial-blacklists-justin-sun-s-address-with-usd107m-wlfi)

[5] Altcoin Season Officially Begins: Bloomberg Analyst (https://finance.yahoo.com/news/altcoin-season-officially-begins-bloomberg-101053860.html)

[6] What is Altcoin Season? When is Altseason in September ... (https://tangem.com/en/blog/post/what-is-altseason/)

[7] Altcoins poised to extend rallies: M, IP, PUMP, SKY, POL (https://crypto.news/altcoins-rally-m-ip-pump-sky-pol-bitcoin-dominance/)