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Key Takeaways
- JPMorgan estimates that Solana and XRP ETFs could attract up to $14 billion in investments within the first year if approved.
- Skepticism remains about the near-term approval of these ETFs given regulatory concerns about classifying tokens as securities.
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JPMorgan forecast that Solana and XRP ETFs could generate up to $14 billion in investments during their first 12 months, despite earlier doubts about SEC approval.
The projection, shared by VanEck’s head of digital assets research Matthew Sigel, is based on market penetration rates similar to existing Bitcoin and Ethereum ETFs, which currently represent 3-6% of their respective tokens’ market capitalizations.
Based on Solana’s current market cap of $90.5 billion, ETF assets could reach $5.2 billion at 6% penetration or $2.7 billion at 3% penetration, JPMorgan notes.
For XRP, with a market cap of $146.5 billion, potential ETF assets could reach $8.4 billion at 6% penetration or $4.3 billion at 3% penetration.
Nikolaos Panigirtzoglou, managing director at JPMorgan, previously expressed skepticism about near-term approvals for ETFs that give exposure to other crypto assets beyond Bitcoin and Ethereum.
“We don’t think the SEC would go even further by approving Solana or other token ETFs given the SEC has stronger (relative to Ethereum) opinion that tokens outside Bitcoin and Ethereum should be classified as securities,” he told The Block.
Following the debut of US-listed spot Bitcoin ETFs, the SEC approved eight spot Ethereum ETFs from major asset managers like Grayscale, BlackRock, and Fidelity last May.
However, the outlook for ETFs tied to other crypto assets, such as Solana and XRP, may not be as favorable. SEC Chair Gary Gensler has maintained that many crypto assets are classified as securities.
With Gensler set to depart next week as President-elect Donald Trump takes office, the SEC will welcome a new chairman, Paul Atkins, who is viewed as more supportive of crypto and innovation. This change in leadership, once confirmed by the Senate, could open the door to a more favorable regulatory environment.
Nate Geraci, president of The ETF Store, forecasts that 2025 will be a landmark year for crypto ETFs. The analyst predicts the launch of at least 50 new products, including those linked to Solana.
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This article first appeared at Crypto Briefing
