Crypto ETFs Continue to Attract Investor Funds At a Rapid Rate. These Are the Only 3 Altcoins I'm Buying Now.

The crypto bear market might finally be ending. U.S. spot crypto exchange-traded funds (ETFs) saw $2.1 billion in net inflows in the week ended Aug. 28, with about $321 million of that sum entering altcoin funds.

Capital inflows aren't a strong reason to buy a coin on their own, as they just indicate how the market reacted to recent events. But, particularly for the only three altcoins I'm interested in buying right now, the success of their corresponding ETFs is a very positive sign about their future trajectory, so let's take a look at each to see if you might be interested in buying them, too.

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1. Solana just voted 18.9 million coins out of its future supply

Spot Solana (CRYPTO: SOL) ETFs, led by the Bitwise Solana Staking ETF, experienced inflows of $153.8 million in the week ended Aug. 28, more than five times the prior week.

Those inflows arrived alongside a vote in which the network's validators approved a proposal called SGP-0002; it will now double the rate at which new Solana coin issuance declines, from 15% to 30%, thereby cutting down on supply growth.

New coins will still get minted to pay the network's validators, but for holders, the prospect of shouldering constant dilution of their value at a fast pace over the long term is now reduced a bit. The proposal calculates that it will lead to 18.9 million Solana coins (585 million coins are now in circulation) never being created during a six-year period.

When paired with the successful rollout of its on-chain governance facility, and its growing ecosystem of tokenized stocks and other projects, there are plenty of reasons that make me want to own more of this coin.

2. This privacy coin just got its own ETF

On Aug. 25, Zcash (CRYPTO: ZEC) got its first spot ETF when the asset manager Grayscale listed The Zcash ETF.

The fund was a conversion from an existing trust, so there isn't any data about how much it experienced in the way of inflows. Given that the coin's price is up by more than 45% in the five-day period ended Sept. 7, it's likely there's no shortage of capital flowing into the fund anyway.

I'm buying the coin again after having sold it earlier this year because it has regained my trust.

In short, a security researcher found a critical flaw in its code in late May. The bug could have let someone mint counterfeit coins without detection, due to its privacy features, and, due to the strength of those same features, it likely won't ever be possible to identify who might have minted any counterfeits or when. To address this issue, after initially making a quick patch, the coin's developer team pushed an upgrade in late July that ensured that no more value could exit from the network's private pools than what was originally put in.

Now, I'm more confident that its supply policy, inspired by Bitcoin, will actually be able to maintain the asset's scarcity while also offering privacy to its users, so I'm willing to buy again. Plus, the resilience of the coin's privacy functions appears to have held up even as its own developer team worked to assess the security gap, which speaks to the standard of privacy protection that's possible.

3. Hyperliquid's buybacks just got a free tailwind

Hyperliquid (CRYPTO: HYPE) is a network as well as a decentralized crypto exchange (DEX) that captures transaction fees paid by its users, and it then routes most of those fees to the holders of its coin via coin buybacks, reducing the circulating supply. And it just got another funnel that directs value into more buybacks, and for no additional work.

On Aug. 26, it activated a deal it signed earlier this year with Coinbase Global and Circle Internet Group that delivers about 90% of the cost-adjusted interest earned on the USDC stablecoins that users hold on its platform and spends it on buybacks. Bitcoin.com News estimated that the arrangement could add as much as $160 million for buybacks per year, in addition to the roughly $770 million a year already flowing in.

As a result of the deal starting to accrue interest, which will be paid out to the network in early October, spot Hyperliquid ETFs brought in $56.8 million in inflows in the week ended Aug. 28.

I already hold some Hyperliquid, but now that it has another mechanism that will add to buybacks, I have no problem with buying even more of it.

Alex Carchidi has positions in Bitcoin, Hyperliquid, Solana, and Zcash. The Motley Fool has positions in and recommends Bitcoin, Hyperliquid, and Solana. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.