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.

The recent U.S. presidential election has brought promising news for the cryptocurrency industry, with the potential approval of Solana (SOL) and XRP (XRP) exchange-traded funds (ETFs) being a key topic of discussion.

Following Donald Trump's return to the White House, optimism has surged for the introduction of crypto ETFs, given the contrasting stance of the Biden administration, which has been cautious in its approach to the digital asset sector.

While Solana ETF proposals appear to be well-positioned for potential approval due to institutional enthusiasm, the story is more complicated for XRP ETFs, with several factors influencing their chances.

Under Trump's leadership, the crypto industry anticipates a shift in the regulatory climate, hoping that his administration will pave the way for smoother approval of digital asset funds.

“These altcoin ETFs were going to be pretty much dead-on-arrival if Harris won,” said Eric Balchunas, Bloomberg's senior ETF analyst, regarding the prospects of altcoin ETFs.

“But with Trump, they at least have a fighting chance.” Balchunas acknowledged that Trump's return does not guarantee approvals but noted that the regulatory hurdles facing these ETFs will likely be reduced.

The U.S. Securities and Exchange Commission (SEC) received several ETF applications in 2024, with proposals covering digital assets such as Solana, XRP, and Litecoin (LTC).

Earlier last month, Canary Capital filed for spot Solana, Litecoin, and XRP ETFs. Prior to that, Bitwise filed for a spot XRP ETF in September, while VanEck filed for a SOL ETF in July.

These filings are part of a broader effort to expand the crypto industry's footprint in the mainstream market through traditional finance channels.

Currently, investors can access ETFs that track Bitcoin (BTC) and Ethereum (ETH), which have attracted significant inflows — over $24 billion for Bitcoin ETFs. However, spot Ethereum ETFs have seen roughly $500 million in outflows since their debut.

In the approval process, the Solana ETF seems to have an upper hand. Noelle Acheson, author of the Crypto Is Macro Now newsletter, suggests that Solana's strong appeal among institutional investors, coupled with a straightforward market narrative, could boost its chances.

“Solana is positioned as an Ethereum competitor and has outperformed massively recently,” said Acheson.

However, she notes that uncertainty around XRP arises from ongoing questions about the token's utility and role in the digital economy.

“The problem with XRP is that people struggle to understand what it is,” she said, highlighting a primary obstacle for the asset's ETF.

Trump's support for digital assets marks a shift from his previous skepticism, which was evident during his campaign when he promised to replace SEC Chair Gary Gensler with a pro-crypto figure.

The SEC, however, is an independent regulatory body, and the extent of Trump's influence over its operations remains to be seen.

“While they may be more friendly on the crypto industry with a new chief,” Stephane Ouellette, CEO of FRNT Financial, commented, according to Bloomberg.

“The SEC is a massive bureaucracy that's hard to predict.” Ouellette added that a Trump administration could still boost confidence among crypto firms and startups that are concerned about regulatory repercussions, allowing 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

It's also worth noting that in the wake of Trump's victory, crypto markets surged, with Bitcoin reaching new highs, and smaller digital assets following suit.

BlackRock's Bitcoin ETF, IBIT, saw $4.1 billion in trading volume on Wednesday, marking a record for the ETF, which launched in April.

Yet, XRP ETF aspirations still face challenges despite the promising climate for crypto ETFs in general.

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