How Do Exchange-Traded Funds (ETFs) on Altcoins Manage the Risk of Low-Difficulty Coins?

Altcoin ETFs, if they were to include low-difficulty coins, would likely mitigate risk through diversification, holding a basket of various assets to dilute the impact of a single coin's failure. Furthermore, the ETF provider would impose strict custody and security protocols, potentially using institutional-grade cold storage and demanding higher security standards from the underlying exchanges.

They might also exclude the most vulnerable coins entirely.