Crypto ETFs Fuel Surge in Altcoin Demand
Investors are pouring money into crypto ETFs, especially those focused on altcoins. Solana (SOL), Zcash (ZEC), and Hyperliquid (HYPE) have seen significant inflows in recent weeks.
Solana's spot ETFs saw $153.8 million in inflows the week ended August 28, more than five times the previous week. This is partly due to a proposal that will reduce the rate at which new Solana coins are issued, from 15% to 30%. This means that 18.9 million Solana coins will not be created over the next six years.
Zcash just got its first spot ETF when Grayscale listed The Zcash ETF on August 25. Its price is up by more than 45% in the five-day period ended September 7, suggesting strong demand for the coin. A critical flaw was found in Zcash's code in late May, but the developer team pushed an upgrade in July that ensured no value could exit from the network's private pools without detection.
Hyperliquid's buybacks just got a boost with a deal it signed earlier this year with Coinbase Global and Circle Internet Group. This agreement delivers about 90% of the cost-adjusted interest earned on USDC stablecoins held on its platform, which will be used for buybacks. Spot Hyperliquid ETFs brought in $56.8 million in inflows the week ended August 28.