XRP and Solana race toward the next crypto ETF approval

XRP and Solana are both making strides toward securing approval for their own spot exchange-traded funds (ETFs), each with a compelling case to be the first to cross the regulatory finish line.

Both XRP (XRP) and Solana (SOL) have recently seen major ETF-related developments. The US Securities and Exchange Commission formally acknowledged a Solana-based ETF application on Feb. 6, the same day four fund managers joined the line for XRP ETF applications.

On Polymarket, traders currently give Solana ETFs the edge, with an 85% chance of approval in 2025, compared with XRP’s 80%. However, betting volumes remain relatively low, with $34,748 staked on XRP (listed as “Ripple”) and $65,761 on Solana at the time of writing.

More activity has emerged around a nearer-term deadline. For an ETF approval by July 31, bettors have wagered $207,980 on Solana, with odds at 36%. Meanwhile, XRP has drawn $102,069 in bets, with a higher 40% probability.

A few years ago, the idea of an XRP or Solana ETF would have been dismissed outright, but the script has flipped since the SEC approved spot Bitcoin (BTC) ETFs in January 2024, followed by Ether (ETH) products.

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Now, US regulatory winds are shifting in favor of crypto. The end of Gary Gensler’s term as SEC chair concluded an era defined by what critics call “regulation by enforcement.” The US now has what market watchers are calling the first crypto-friendly president, Donald Trump, who took office on Jan. 20. 

Solana’s path to ETF approval

Several factors have Polymarket betters predicting Solana has a better chance than XRP at being approved for an ETF first. For one, the SEC’s Feb. 6 acknowledgment of Grayscale’s application to convert its Solana Trust into an ETF has set an October deadline for a decision.

Beyond regulatory momentum, Solana’s strong network activity over the past year further strengthens its case. The blockchain has proven itself as a reliable network for transactions and smart contracts, most notably becoming the go-to chain for the recent memecoin trading frenzy, which saw billions in trading volume.

“This distinction is crucial,” Yuriy Brisov, a securities lawyer at Digital & Analogue Partners, told Cointelegraph. “If an asset’s primary purpose is operational rather than investment-oriented, it could more readily avoid the pitfalls of securities regulation.”

However, Solana remains entangled in securities-related legal challenges. In January, James Seyffart, an analyst at Bloomberg Intelligence, predicted that an SEC approval for a Solana ETF may not come until 2026 due to ongoing lawsuits against major exchanges. The SEC’s Enforcement Division claims SOL is a security, which has prevented other divisions of the agency from considering it as an underlying asset for a commodities ETF.

According to The New York Times, the SEC is in the process of reducing its crypto enforcement capabilities by reassigning 50 lawyers.

Why XRP could win the ETF race

Gensler’s tenure as SEC chair was widely criticized for alleged regulatory overreach against crypto firms, but it also set key precedents in landmark cases, including Ripple Labs’ partial victory against the SEC.

During his time as chair, Gensler’s SEC aggressively pursued enforcement actions against crypto firms, targeting major exchanges like Coinbase and Binance, and classified numerous digital assets — including SOL, Cardano’s ADA (ADA), and Polygon’s POL (POL) — as unregistered securities. 

His approach, often described as “regulation by enforcement,” drew backlash from industry leaders, lawmakers and even some SEC commissioners, who accused the agency of stifling innovation and failing to provide clear guidelines for crypto companies.

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One of the most significant legal setbacks for the SEC came in July 2023, when US District Judge Analisa Torres ruled that XRP itself is not inherently a security, and that only its institutional sales constituted securities transactions under the Howey test.

Meanwhile, no court ruling has yet set a legal precedent regarding SOL’s classification as a security or the nature of its related sales. The SEC’s lawsuits against major exchanges — which claim that SOL is an unregistered security — are still pending, leaving its regulatory fate uncertain.

“XRP holds a unique position among altcoins due to its partial legal clarity in the US,” Vugar Usi Zade, chief operating officer of Bitget, told Cointelegraph. He added that the precedent sets XRP apart from other cryptocurrencies.

XRP is an established and highly liquid cryptocurrency with the fourth-largest market cap in the industry at $142 billion. But its close association with Ripple could be a barrier to an ETF approval, Zade added.

“The SEC has previously argued that Ripple’s influence over XRP raises centralization concerns, which conflicts with the decentralization standards it has applied to Bitcoin and Ethereum.”

Zade further explained:

“While XRP has legal clarity regarding secondary sales, regulatory uncertainty still lingers around Ripple’s ecosystem and how that might impact an ETF structure. These concerns could make the SEC reluctant to approve an XRP ETF in the near term.”

Litecoin may beat both XRP and Solana

The number of XRP and Solana ETF applications has been steadily rising, fueling widespread speculation. Recently, CME Group’s website briefly hinted at listing XRP and SOL futures contracts. With previous spot Bitcoin ETF approvals, the existence of a regulated futures market was cited as a key factor in the SEC’s decision.

However, CME Group quickly removed the web page, saying its appearance was an error. This raised more questions than answers about whether the derivatives giant is actively considering futures contracts for these assets or if it was simply a technical error.

Both XRP and SOL are among the most mature digital assets, ranking in the top 10 by market cap and trading volume. XRP enjoys strong support from its tribe-like community, while Solana has emerged as a dominant player in decentralized finance and arguably the champion in memecoin trading.

But sometimes, seniority matters. According to Bloomberg’s Seyffart, Litecoin (LTC) — a cryptocurrency launched in 2011 — may be first in line for a spot ETF approval.

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