Solana and Ripple consider ETF inclusion amidst the Altcoin Bandwagon surge
With the recent approval of an essential filing in the quest to launch a spot ether (ETH) exchange-traded fund (ETF), industry leaders and investors are eagerly speculating about which cryptocurrency could be next in line for similar recognition. The Securities and Exchange Commission (SEC) has given the green light to forms 19b-4 filed by potential issuers, marking a significant milestone. However, this is just one step in a complex approval process that requires further regulatory scrutiny.
The Current State of Ether ETFs
The SEC’s approval of the 19b-4 forms represents a pivotal moment in the cryptocurrency market, particularly for ether. This form is essential for proposed rule changes by self-regulatory organizations like exchanges. However, the journey to a fully approved spot ether ETF is far from over. The S-1 document, a more detailed registration statement, still awaits approval, and this process can be protracted, taking weeks, months, or even extending indefinitely.
Industry experts and analysts are already looking beyond the ether, considering which cryptocurrencies might follow in their footsteps. Notably, Standard Chartered has identified Solana (SOL) and Ripple’s XRP as potential candidates, albeit not until 2025.
Why Solana and XRP Could Be Next
Geoffrey Kendrick, an analyst at Standard Chartered, noted that while Bitcoin and ether ETF currently dominate the market, other cryptocurrencies like Solana and XRP are also gaining traction. “For other coins (e.g., SOL, XRP), markets will look ahead to their eventual ETF status as well, albeit this is likely a 2025 story, not a 2024 one,” Kendrick explained. This suggests a growing recognition of these digital assets’ potential within the financial ecosystem.
Several factors make Solana a logical candidate for a spot ETF. Solana’s technology and market position resembles Ethereum’s, particularly its focus on decentralized applications and smart contracts. Solana’s high throughput and low transaction costs have made it an attractive platform for developers and users alike. With a market cap ranking third among cryptocurrencies (excluding stablecoins like Tether and Binance Coin), Solana has the liquidity and market interest necessary to support an ETF.
Ripple’s XRP, on the other hand, has carved out a niche in facilitating cross-border payments and remittances. Despite ongoing legal challenges with the SEC regarding its status as a security, XRP’s established use case and significant market presence make it a strong contender for future ETF consideration.
The Impact of SEC Approval on the Market
The entire cryptocurrency market is closely monitoring the SEC’s approval process for ether ETFs. The approval of a spot ether ETF could pave the way for other cryptocurrencies to follow suit, potentially leading to increased market liquidity and greater institutional investment. This would not only solidify Ether’s status but also validate the broader cryptocurrency market in the eyes of traditional financial institutions.
Brokerage firm Bernstein highlighted in a note that Ethereum’s classification as a commodity could simplify the regulatory pathway for Solana. Given Ethereum’s established legal framework, Solana might be able to leverage similar arguments to gain regulatory approval, making it a strong candidate for the next ETF after Ether.
The Road Ahead: 2025 and Beyond
While the current focus is on ether, the potential for Solana and XRP to achieve ETF status by 2025 represents a significant shift in the market. As cryptocurrencies continue to evolve and mature, regulatory frameworks are likely to adapt, providing clearer guidelines for the approval of new financial products.
The anticipation surrounding future ETFs also underscores the dynamic nature of the cryptocurrency market. Investors and market participants are continuously evaluating which assets might gain regulatory approval next, influencing trading strategies and investment decisions.
Key Takeaways for Investors
Current Focus on Ether: The SEC’s recent approval of forms 19b-4 for ether ETFs is a critical step, but the full approval process remains uncertain.
Future Contenders: Solana and XRP are viewed as strong candidates for ETFs, potentially by 2025, due to their market position and technological advancements.
Regulatory Landscape: The approval of ether ETFs could set a precedent, making it easier for other cryptocurrencies to gain similar recognition.
Market Implications: Successful ETF launches can increase market liquidity and attract more institutional investors, boosting cryptocurrencies’ overall credibility.
Conclusion
The approval of a spot ether ETF by the SEC marks a significant milestone in the cryptocurrency market. While the full approval process is ongoing, the potential for future ETFs for cryptocurrencies like Solana and XRP highlights the evolving nature of the market. As regulatory frameworks become more defined and the market matures, these digital assets could see increased adoption and integration into traditional financial systems.
