Why Bitwise's New ETF Strategy Excludes Cardano and What It Means for Altcoin Investors

The recent expansion of Bitwise's crypto ETF offerings-targeting altcoins like Aave (AAVE), Hyperliquid (HYPE), and Tron (TRX)-has sparked questions about the exclusion of Cardano (ADA), a project once considered a top-10 cryptocurrency. This analysis delves into the rationale behind Bitwise's strategy, focusing on market cap relevance and institutional sentiment, two critical factors shaping institutional-grade crypto portfolios in 2025.

Market Cap Relevance: A Threshold for Institutional Adoption

Bitwise's new ETFs allocate up to 60% of assets directly in underlying tokens, with the remainder in derivatives or ETPs to ensure liquidity and regulatory compliance according to Bitwise's professional approach. This structure inherently favors tokens with sufficient market capitalization to support institutional-scale investments without excessive volatility or illiquidity.

Cardano's Q4 2025 market cap of approximately $13–14 billion according to Cardano statistics places it on the fringes of the top 10, a position increasingly precarious amid stiff competition. By contrast, Hyperliquid (HYPE) secured a $13.04 billion market cap, ranking 11th according to cryptocurrency market data, while Aave (AAVE) held a $3.04 billion market cap at 36th according to the same market data. These figures highlight a stark disparity: Hyperliquid's capitalization is nearly 10x that of Aave, and both significantly outpace Cardano's institutional-grade peers.

The exclusion of Cardano aligns with Bitwise's focus on tokens with structural revenue generation and execution resilience. Hyperliquid, for instance, generated $816 million in 2025 revenue, while Aave's dominance in decentralized lending captured nearly half of DeFi fees according to DeFi research. Cardano, meanwhile, lacks comparable revenue streams or institutional-grade infrastructure, despite its retail-friendly narrative.

Institutional Sentiment: A Barometer for Risk and Opportunity

Institutional sentiment in 2025 has become a decisive factor in crypto asset selection. Bitwise's filings emphasize tokens with clear utility, governance, and adoption metrics, all of which are critical for mitigating regulatory and operational risks according to Bitwise's professional approach.

Cardano's institutional sentiment remains mixed. While retail investors showed bullishness in late 2025 according to market sentiment analysis, the project's Fear and Greed Index lingered in "fear" territory (score of 38) according to the Fear and Greed Index, and its price trend remained bearish despite the launch of the Midnight project according to market sentiment analysis. In contrast, Aave and Hyperliquid demonstrated institutional-grade adoption:
- Aave prepared for its v4 upgrade according to market sentiment analysis, enhancing its role in DeFi lending, while its price showed technical indicators of a potential $185–$195 recovery according to price prediction analysis.
- Hyperliquid executed a $912 million token burn according to market statistics and launched features like Portfolio Margin, signaling confidence in its capital efficiency and user retention according to project analysis.

These actions reflect a proactive approach to institutional demand, a trait absent in Cardano's 2025 roadmap. As one analyst noted, "Institutional money is flowing to protocols that demonstrate structural improvements and fee capture-Cardano hasn't met that bar yet" according to institutional crypto analysis.

Implications for Altcoin Investors

Bitwise's strategy underscores a broader trend: institutional investors are prioritizing tokens with proven utility and revenue models over speculative narratives. For altcoin investors, this means:
1. Re-evaluating exposure to lower-market-cap assets: Projects like Cardano may require significant catalysts (e.g., Hydra scaling solutions) to regain institutional traction according to crypto investment analysis.
2. Focusing on sector-specific opportunities: Aave's DeFi lending dominance and Hyperliquid's derivatives execution highlight the importance of niche infrastructure in institutional portfolios according to DeFi research.
3. Monitoring regulatory alignment: Bitwise's emphasis on liquidity and derivatives according to Bitwise's professional approach suggests that tokens with clear regulatory pathways (e.g., ETF approvals) will dominate future strategies.

Conclusion

Bitwise's exclusion of Cardano from its 2025 ETF strategy is not a dismissal of the project's long-term potential but a reflection of current market realities. With a market cap struggling to maintain top-10 status and institutional sentiment skewed toward fear, Cardano lags behind altcoins like Aave and Hyperliquid, which offer clearer utility and revenue generation. For altcoin investors, the lesson is clear: institutional-grade crypto portfolios are increasingly defined by market capitalization, structural resilience, and adoption metrics-factors that will shape the next phase of the crypto market's evolution.