As the U.S. Securities and Exchange Commission (SEC) gave the green light to spot Bitcoin and Ethereum ETFs this year, excitement surged within the crypto community for potential Solana (SOL) and XRP exchange-traded funds. However, experts like Nate Geraci, president of The ETF Store, caution that expectations for these ETFs may be premature.
A Glimmer Of Hope For Solana and XRP ETFs
The approval of spot crypto ETFs for Bitcoin and Ethereum set the stage for further advancements in the ETF space. Solana, known for its high-speed transactions and low fees, seemed poised to be a next logical choice for an ETF. The excitement ramped up after Brazil approved two Solana ETFs, further boosting speculation that the U.S. market could follow suit. The same is true for XRP, which recently saw a positive shift after Ripple’s partial victory in the SEC lawsuit.
Institutional demand for these assets is growing, with filings for a Solana ETF by VanEck and 21Shares capturing attention. XRP’s chances appeared even brighter after Ripple’s president Monica Long hinted at potential ETF developments, bolstered by Grayscale’s announcement of its XRP Trust. Despite these positive signals, Geraci warns investors to temper their optimism.
Nate Geraci – Don’t Expect Solana or XRP ETFs Anytime Soon
Geraci’s insights, shared in a recent post on X (formerly Twitter), suggested that spot Solana and XRP ETFs may remain elusive for the next year or two. “Nothing would indicate a spot Solana or XRP ETF is possible in the next year or two given the current state,” he said, pointing to both market and regulatory challenges.
Geraci attributes the hurdles partly to the U.S. regulatory climate under the current administration. He speculated that potential approval might depend on the outcome of the 2024 U.S. elections. Should Republican candidates, particularly Donald Trump or pro-XRP lawyer John Deaton, gain traction, the odds could improve. However, Geraci remains skeptical, emphasizing that any real movement would require significant shifts in both regulatory policy and market conditions.
Regulatory and Market Roadblocks
Solana’s ETF prospects, while bolstered by international approval, remain hampered by the SEC’s reluctance to move forward with similar offerings in the U.S. Following the SEC’s delays, Solana’s price fell over 2% this month, dampening investor sentiment.
Meanwhile, the case for an XRP ETF has gained momentum since Ripple’s legal victory over the SEC. Recent developments, including the launch of the CME XRP Index and Grayscale’s XRP Trust, have underscored XRP’s potential integration into traditional finance. However, without further regulatory clarity, the launch of a spot XRP ETF seems far off.
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While the demand for spot Solana and XRP ETFs continues to grow, regulatory headwinds are likely to delay their arrival. Despite some optimism tied to political outcomes and ongoing market developments, experts like Nate Geraci urge caution. The crypto community may need to wait several more years before seeing these ETFs materialize in the U.S. market.
In the meantime, investors should closely watch regulatory signals and market movements, as any changes could significantly impact the landscape for Solana and XRP ETFs.
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.