Bitcoin’s dominance in the cryptocurrency world is beginning to wane as interest and excitement grow around Ether and Solana. Investors are increasingly turning their attention to these smaller digital assets, driven by the buzz surrounding new cryptocurrency exchange-traded funds (ETFs) in the US.

On Thursday, Solana experienced its largest surge in over a month after VanEck, a well-known fund manager, filed an application to launch an ETF for the token. Ether has also gained significant traction this year, partly because of the anticipation surrounding the final approvals for funds centered on it.

At the beginning of 2024, Bitcoin was the star of the show with the launch of the first US spot ETFs for the largest digital currency. Products from major financial institutions like BlackRock Inc. and Fidelity Investments saw substantial inflows, propelling Bitcoin to a record high of $73,798 in March. However, the demand and price have since cooled off.

Last month, the US Securities and Exchange Commission (SEC) approved proposals from stock exchanges to list spot-Ether ETFs. Some reports suggest that final approvals for these ETFs might come as early as next week.

Analysts are now reassessing their expectations regarding demand for Ether ETFs. Although Ether is less well-known than Bitcoin, experts believe that US-based ETFs could attract $5 billion in net inflows within the first five months, according to predictions from Galaxy Digital Holdings LP and Fundstrat Global Advisors LLC.

“Market sentiment surrounding the Ether ETF launch is overly pessimistic,” wrote Sean Farrell, Head of Digital Asset Strategy at Fundstrat, in a note. He anticipates that these ETFs will gain momentum from hedge funds engaging in basis trades, which exploit differences between the spot and futures markets.

Ether has increased by 49% since the start of the year, outpacing Bitcoin’s 45% rise. Solana, also referred to as SOL, had already surged 754% over the past year before Thursday’s gains, making it the fifth-largest digital asset by market capitalization.

Since their listing in January, US Bitcoin ETFs have attracted $14.5 billion in net inflows. Meanwhile, strategists at JPMorgan Chase & Co. estimate that the forthcoming Ether ETFs could draw a “modest” $1 billion to $3 billion in net inflows over the rest of 2024.

The SEC’s decision to approve spot-Ether ETFs marks a significant shift. Previously, the SEC had reluctantly allowed Bitcoin funds following a court ruling in 2023. While Bitcoin is classified as a commodity, SEC Chair Gary Gensler has argued that most other cryptocurrencies are unregistered securities and should fall under the agency’s regulatory framework. Gensler has remained unclear on whether Ether should be classified as a security.

In summary, the cryptocurrency landscape is evolving rapidly. As Bitcoin’s initial excitement cools, Ether and Solana are gaining prominence, driven by new ETF launches and shifting regulatory landscapes. Investors and analysts alike are keenly watching how these developments will shape the future of digital assets.