Ethereum's ETH/USD powerful rally is reviving optimism across the altcoin space

During an episode of the Wolf of All Streets podcast with Scott Melker published on May 14, Matthew Sigel, Head of Digital Assets Research at VanEck

The powerful rally in Ethereum’s ETH/USD is spilling over into broader optimism for the altcoin space, with top analysts now projecting a full-scale altcoin bull market to emerge in 2025.

During an episode of the Wolf of All Streets podcast with Scott Melker, Matthew Sigel, Head of Digital Assets Research at VanEck, said that Ethereum’s 44% weekly surge has flipped sentiment across the sector.

"We're really starting to see the seeds of an 'altcoin bull market' sprout with Dogecoin and Solana outperforming Bitcoin year-to-date."

He attributes the ETH rally to multiple catalysts, including the upcoming December integration of the highly anticipated "Dengun" upgrade, leadership shifts within the Ethereum Foundation, and an aggressive short squeeze, particularly from institutions that had been short ETH against long BTC and SOL positions.

Sigel added that while short-term headwinds like dollar strength may slow momentum, the structural setup remains bullish. This view was echoed by Bernstein Research, which pointed to Layer 2 adoption, growing stablecoin and tokenization activity and renewed institutional flows.

"Bernstein sees promise in the emerging U.S. institutional market with several converging trends creating a structural setup for continued crypto price appreciation."

Bernstein highlighted that several U.S. institutions, particularly in the mid- to large-cap space, are increasingly allocating to digital assets, having largely completed building out their Bitcoin and Ether core satellite positions and begun exploring broader opportunities in the altcoin ecosystem.

This emerging interest in altcoins is driven by several factors, including the development of Layer 2 scaling solutions for Ethereum, which are enabling faster and cheaper transactions, facilitating broader adoption among institutions and retail users.

Moreover, the burgeoning activity in stablecoins and tokenized assets is opening up new avenues for institutions to participate in DeFi protocols and engage in lending and borrowing activities within the crypto ecosystem.

Furthermore, the renewed inflows of institutional capital into the crypto market are pushing up prices and creating a positive feedback loop. Institutions are enticed by the promise of high returns and the potential for diversification that crypto offers.

Sigel’s remarks come as VanEck launched its new hybrid fund, the Onchain Economy ETF (NØDE), which combines exposure to crypto ETFs (25%) with both high- and low-volatility blockchain equities.

The firm also unveiled a tokenized U.S. Treasury fund, rendering it accessible via Ethereum, Solana, Avalanche AVAX/USD, and BNB Chain, aiming to provide institutional clients with 24/7 access and USDC-based settlement.

Highlighting the growing interest in crypto among financial advisors, Matt Hougan, Chief Investment Officer at BitwiseInvest, shared three key takeaways from attending the Implied Advice Financial Congress.

"I fielded more Ethereum questions in the past few days than in the last six months. Interest in both Bitcoin and Ethereum is surging among financial advisors."

Hougan said that ETP access is expected to be available at most advisory firms by year-end, while the demand from advisors is increasing, with billions in expected inflows and portfolio allocations rising from 1% to 5%.