- Trump’s Return as U.S. President Could Pave the Way for Solana, XRP, and Litecoin ETFs
With Donald Trump returning as the 47th U.S. President, expectations are high that his administration might usher in a more favorable regulatory landscape for cryptocurrency. Trump has made a series of pro-crypto promises, including potentially dismissing SEC Chairman Gary Gensler, a staunch crypto skeptic. This move could open doors for long-awaited exchange-traded fund (ETF) approvals for assets like Solana (SOL), Ripple (XRP), and Litecoin (LTC), providing a boost to the crypto industry.
The Status of XRP, SOL, and LTC ETFs: A Look Ahead
Applications for spot ETFs featuring XRP, SOL, and LTC from notable players like Bitwise, Canary Capital, VanEck, and 21Shares are currently under review by the U.S. Securities and Exchange Commission (SEC). The SEC has until the first quarter of 2025 to make its decisions on these applications. However, for assets like SOL, currently classified as a security by the SEC, approval is complex without regulatory reclassification. LTC, however, is not considered a security, giving it a potential edge in the race for ETF approval.
SEC’s Role and Gensler’s Influence on Crypto Regulation
The SEC, the sole authority on ETF approvals in the U.S., has played a challenging role in the crypto space under Gensler’s leadership. Gensler’s tenure has been marked by stringent enforcement actions and billions in penalties, leading to conflicts with key players in the crypto space, including Ripple, Coinbase, and Uniswap. Although Gensler’s position has helped bring justice in certain fraud cases, his rigid stance on what constitutes a security has stalled several crypto ETF aspirations.
Despite these hurdles, the SEC approved spot Bitcoin and Ethereum ETFs, which commanded substantial market demand, contributing significantly to the crypto market’s momentum in 2024. The success of these ETFs fuels optimism for altcoin-backed ETFs, especially as investor interest grows beyond BTC and ETH.
Litecoin ETF: The Most Likely Candidate
Among the three, Litecoin stands the highest chance of securing SEC approval for a spot ETF. Unlike SOL and XRP, LTC is not classified as a security, clearing a major regulatory hurdle. Additionally, LTC has been traded in traditional markets through exchange-traded products (ETPs) since 2020, with Grayscale’s $129 million LTC fund gaining significant traction. Litecoin’s established presence and lack of regulatory hurdles position it as a frontrunner for ETF approval.
Could Trump’s Administration Fast-Track XRP and SOL ETFs?
XRP and SOL face more complicated paths. XRP remains embroiled in a legal dispute with the SEC, and SOL’s classification as a security adds further regulatory barriers. Nonetheless, Trump’s pro-crypto stance and potential dismissal of Gensler could shift the SEC’s approach. If Gensler were replaced, there might be a reduction in litigation against crypto companies, possibly accelerating ETF approvals for assets like XRP and SOL.
As President Trump takes office, his stance on crypto regulation and his handling of the SEC will be closely watched. Should his administration proceed with favorable crypto policies, altcoin ETFs could be closer to reality than previously expected.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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