JPMorgan: Approval of XRP and Solana ETFs Could Attract $13.6 Billion in Investments in First Year
JPMorgan predicts that if XRP and Solana ETFs are approved, the first year’s capital inflow could reach $13.6 billion. Although the demand may not be as high as for Bitcoin and Ethereum ETFs, their launch will promote market diversification and attract more institutional investors.
(Thailand considers opening Bitcoin ETF, companies can issue stablecoins supported by their own debt)
Market potential of XRP and Solana ETFs
According to JPMorgan’s latest research report, if the new Solana (SOL) and XRP exchange-traded funds (ETFs) receive regulatory approval, it is expected that within the first 6 to 12 months of their launch, they will attract up to $13.6 billion in investment capital, which is about 38% of the current inflow of Bitcoin spot ETFs:
The Solana ETF is expected to attract investments ranging from $2.7 billion to $5.2 billion, while the capital inflow for the XRP ETF is estimated to be between $4.3 billion and $8.4 billion, depending on regulatory progress and investor demand.
(Bloomberg: Multiple cryptocurrency ETFs will emerge by 2025)
At the same time, it also mentioned the slow progress of other cryptocurrency ETF approvals:
The development of ETFs other than Bitcoin and Ethereum can be said to be almost stagnant, mainly due to the unclear regulation of other cryptocurrencies by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
It added, “However, the new government and the new SEC chairman’s appointment provide new opportunities for cryptocurrency innovation.”
(JPMorgan: EU’s MiCA regulations promote the development of Euro stablecoins, the United States may follow suit with Trump’s inauguration)
The report mentioned that the current ETF applications, including Solana, XRP, and LTC, are still under review, but with regulatory personnel adjustments, the possibility of approval by the new government is increasing.
Investor interest will be much lower than BTC and ETH ETFs
Although the launch of Solana and XRP ETFs will have a positive impact on their respective ecosystems, JPMorgan analysts believe that the market demand for these new products may not be as high as the first batch of Bitcoin and Ethereum ETFs:
The impact of the next wave of new cryptocurrency ETFs may be smaller, mainly due to investors’ higher familiarity with Bitcoin and Ethereum, and the need for time to improve the market’s acceptance of other cryptocurrencies.
It emphasized in the report that if the regulatory framework is improved, the launch of XRP and Solana ETFs will help promote market diversification and attract more institutional investors:
Issuing institutions such as VanEck, 21Shares, Bitwise, and WisdomTree have plans to launch more ETFs based on non-mainstream cryptocurrencies this year, which may become an important driving force in the market.
Bitcoin spot ETFs deliver impressive results
Looking back at the cryptocurrency ETFs listed on multiple exchanges in the United States in 2024, a total of 12 Bitcoin spot ETFs have attracted nearly $36 billion in funding, with the largest asset size of BlackRock’s IBIT even surpassing its iShares Gold Trust (IAU) gold ETF:
Among the top five ETFs in terms of capital inflows in 2024, four were Bitcoin spot ETFs. It is incredible that out of the 12 Bitcoin ETFs, 10 occupied the top 50 spots among the newly launched ETFs that year.
(2024 is a fruitful year for ETFs, more cryptocurrency ETFs will be launched in 2025)
Even though XRP and Solana ETFs may face the challenge of relatively limited demand, their launch still brings new growth opportunities to the cryptocurrency market. With further clarification of the regulatory environment, the prospects for these ETFs remain optimistic.
Risk Warning
Cryptocurrency investment carries a high level of risk, and prices may fluctuate dramatically, leading to the possibility of losing all of your invested capital. Please evaluate the risks carefully.
