The chances of Solana and XRP ETFs entering the U.S. market have notably risen following Donald Trump’s presidential win. His return to the White House has fueled optimism for crypto ETFs, contrasting with the Biden administration’s cautious approach to the sector. However, while Solana ETF proposals appear positioned for potential approval due to institutional enthusiasm, XRP ETFs remain a more complicated story.
Will Solana ETF Be Approved Before XRP ETF?
Under Trump’s leadership, the crypto industry anticipates a regulatory climate shift, with hopes that his administration will facilitate smoother pathways for digital asset funds. “These altcoin ETFs were going to be pretty much dead-on-arrival if Harris won,” said Eric Balchunas, Bloomberg senior ETF analyst.
He added, “But with Trump, they at least have a fighting chance.” While he acknowledged that Trump’s return doesn’t guarantee approvals, Balchunas noted that the regulatory hurdles facing these ETFs would likely be reduced.
The U.S. Securities and Exchange Commission (SEC) has received numerous ETF applications in 2024, with proposals covering digital assets like Solana, XRP, and Litecoin. Earlier, last month, Canary Capital filed for spot Solana, Litecoin, and XRP ETFs. Prior to that, Bitwise filed for a spot XRP ETF while VanEck filed for a SOL ETF in July itself.
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These filings represent a concerted effort to expand the crypto industry’s reach to a broader market via the traditional means of finance. Currently, investors can access ETFs that track Bitcoin and Ethereum, which together have drawn impressive inflows — over $24 billion for Bitcoin ETFs. Spot Ethereum ETFs, however, have seen roughly $500 million in outflows since their debut.
The Solana ETF appears to have an edge in the approval process. Noelle Acheson, who authors the Crypto Is Macro Now newsletter, suggested that Solana’s strong appeal among institutional investors, combined with a straightforward market narrative, could boost its chances. “Solana is seen as an Ethereum competitor and has very much outperformed recently,” Acheson stated.
The uncertainty around XRP, she explained, stems from lingering questions about the token’s utility and purpose in the digital economy. “The problem with XRP is that people struggle to understand what it is,” she noted, highlighting a key obstacle for the asset’s ETF.
How Trump Administration Can Change the Crypto Regulatory Scene
Trump’s advocacy for digital assets marks a shift from his previous skepticism, evidenced by his campaign promise to replace SEC Chair Gary Gensler with a pro-crypto figure. However, the SEC remains an independent regulatory body, and the extent of Trump’s influence over its operations is not yet clear.
“While they may be more friendly on the crypto industry with a new chief,” commented Stephane Ouellette, CEO of FRNT Financial, according t6o a Bloomberg report. In addition, he noted that “the SEC are a massive bureaucracy that’s hard to predict.” Ouellette pointed out that a Trump administration might still boost confidence among crypto firms and startups wary of regulatory repercussions, enabling them to focus on growth.
$IBIT just had its biggest volume day ever with $4.1b traded.. For context that’s more volume than stocks like Berkshire, Netflix or Visa saw today. It was also up 10%, its second best day since launching. Some of this will convert into inflows likely hitting Tue, Wed night pic.twitter.com/vy2zJBwaHd
— Eric Balchunas (@EricBalchunas) November 6, 2024
Meanwhile, it’s important to note that in the wake of Trump’s win, crypto markets have surged, with Bitcoin reaching new highs and smaller digital assets following suit. BlackRock’s Bitcoin ETF, for instance, saw $4.1 billion in trading volume on Wednesday, marking a record. Yet XRP ETF ambitions still face challenges, despite the promising climate for crypto ETFs in general.
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Analysts from Bernstein, led by Gautam Chhugani, anticipate regulatory tailwinds from Trump’s presidency, stating, “Regulatory tailwinds under a Trump presidency are far from being priced in.” With a projected $200,000 Bitcoin price target by 2025, they see strong momentum building.
Also Read: Ripple (XRP) Could Be the Hardest Pumping Coin If Donald Trump Does This
