"It's not just their league"… How ETFs have changed the cryptocurrency investment landscape

Source: DigitalToday Original Title: “Not Just Their League”… How ETFs Are Changing the Cryptocurrency Investment Landscape Original Link:

Since its inception, the cryptocurrency market has been characterized by a strong “faction culture” that supports only certain coins. Bitcoin maximalists(and purists) have rejected other coins, while the Ethereum camp prided itself on building the next-generation internet. Solana, XRP, Chainlink, among others, have competed based on their own strong fandoms. However, with the advent of exchange-traded funds (ETFs)(ETF), signs of a shift in this landscape are beginning to emerge.

On the 9th(local time), blockchain media reported that the introduction of ETFs is transforming the culture of the crypto market from “factionalism” to one focused on “portfolio management.”

Cryptocurrency ETFs provide investors with an environment where they can access a variety of coins with just a single click. Now, not only Bitcoin and Ethereum, but also Solana, Dogecoin, Chainlink, and others, flow through the same financial infrastructure. They pass through the same custodians and clearinghouses(DTCC) and are under the control of the same institutional investors and risk management teams.

This suggests that rational portfolio management has become more important than blind brand loyalty. In fact, since 2022, the 90-day correlation coefficient between Bitcoin and Ethereum has averaged 83%. This high correlation is not because their fundamentals are identical, but because the infrastructure through which capital flows and trades has become unified.

Of course, the intrinsic faction culture of cryptocurrencies will not disappear overnight, but as institutional investment structures like ETFs become established, the market is likely to gradually move as a “united team.” The key focus of the market moving forward is expected to shift from “which coin is superior” to “how to allocate the proportion of digital assets within the entire portfolio.”

As infrastructure integration increases and correlations between assets rise, the previously exclusive fan culture is expected to diminish. The industry believes that cryptocurrencies will evolve from a “their own league” to a popular investment product, similar to stocks, that anyone can own.