Wall Street's push to approve altcoin exchange-traded funds (ETFs) in October has been dubbed a “cointober” by some analysts, drawing renewed attention to institutional investors' growing appetite for cryptocurrencies.
This also raises questions about decentralization and institutional verification.
cointober frenzy
According to Alpharactal, 59% of institutional investors plan to allocate more than 5% of their assets under management to cryptocurrencies in 2025, a significant increase from less than 2% in 2023. This could potentially result in $2.4 trillion of capital flowing into digital assets.
However, the data analytics platform warns that these ETFs may be legitimizing corporate-controlled tokens rather than democratizing access to decentralized networks. Analysis of major altcoins reveals significant central control. For example, the platform found that Ripple Labs controls 45-51% of the total XRP supply, of which 40-45% is held in escrow and 5-6% held by the Treasury.
Meanwhile, Solana's governance remains heavily influenced by Solana Labs and the Solana Foundation, with the foundations holding about 40% of the uncirculated tokens and venture capital firms and insiders controlling about 50%. Although Ethereum is more decentralized, it is still guided by the Ethereum Foundation when it comes to protocol development. Unlike Bitcoin, which operates without a central control entity, these altcoins maintain a corporate governance structure that allows large holders to shape policy and influence network operations.
Alpharactal's data comes from over 1,000 on-chain, derivative, and sentiment indicators and shows that institutional adoption closely aligns with these central control patterns. Network stress index and true market average price metrics indicate that these altcoin networks are operationally stable despite intensive governance.
The approval schedule for ETFs has also been shortened from 240 days to 75 days. This could speed up institutional validation for these centralized tokens. Alfaractal argues that this process effectively transforms access to corporate-managed blockchain assets into a regulated investment vehicle, rather than providing true decentralized exposure. Its macroeconomic and derivatives analysis shows that financial institutions prefer regulated exposure to direct ownership of native tokens.
Al-Faraktar said the broader debate should be whether ETF listings are a legitimate step toward mainstream adoption or an erosion of decentralized principles.
control and profit
These concerns echo those of Vander Aljara, co-founder of Black Swan Capitalist, who has previously been sharply critical of the XRP ETF. Earlier this year, Aljara warned investors not to mistake this for true access to cryptocurrencies. He emphasized that these ETFs are not intended to democratize ownership or unlock utility for investors. Instead, he framed them as instruments focused on control and profit. Owning native XRP allows for transfers, staking, liquidity provisioning, and participation in other network functions, whereas ETFs only provide price exposure and deprive investors of the ability to move, exchange, or self-custody their tokens.
Aljara’s argument highlighted a fundamental trade-off in that investors could gain exposure to Wall Street-regulated XRP without truly engaging with the token’s functional utility.
