Bitcoins
- JPMorgan predicts altcoin ETFs, including Solana and XRP, could attract US$14B if approved.
- Solana ETFs may draw around US$6B in inflows, while XRP could see US$8B in six months.
- 2025 could be the “year of Crypto ETFs”, according to another analyst.
Investment bank JPMorgan says Solana (SOL) and XRP (XRP) exchange-traded funds (ETFs) could attract nearly US$14B (AU$22B) in inflows if approved, mirroring Bitcoin (BTC) ETFs.
As per a Bloomberg report, the analysts based their expectations on a more innovation-friendly regulatory environment under the incoming administration of President-elect Donald Trump, set to take office on January 20.
Related: Michael Saylor Champions Bitcoin as Superior to ‘Toxic’ Bonds in Corporate Strategy Shift
JPMorgan projects that a Solana-based ETF could attract US$3B (AU$4.8B) to US$6B (AU$9.6B) in net assets, while XRP-based ETPs may gather US$4B (AU$6.4B) to US$8B (AU$12.9B) within their first six months of trading.
These projections stem from adoption trends seen in Bitcoin and Ethereum (ETH) ETFs, which achieved 6% and 3% adoption rates during their initial months.
The report notes that new crypto-based ETFs could mirror the impact of Bitcoin ETFs, contributing to Bitcoin regaining the US$50,000 mark less than a month after its debut in January 2022. Bitcoin ETFs accounted for 75% of new investments during this period, nearly surpassing US$110 billion (AU$177.6 billion) in cumulative holdings by their first anniversary.
Episodic Nature of Crypto Makes Predictions Difficult
However, the investment bank feels uncertain about altcoin adoption rates. While Bitcoin and Ether have demonstrated steady demand, investor interest in currencies like SOL and XRP can shift overnight due to new emerging trends in the market:
Outside of a few primary tokens (BTC, ETH, SOL), the episodic nature of the crypto market is driven by varying investor sentiment and trendy new coins that may capture incremental attention for a limited time.
JPMorgan
Therefore, tokens with limited market depth might struggle to sustain an ETF.
With companies like VanEck, 21Shares, Bitwise, WisdomTree and Canary Capital seeking approval for ETPs for Solana and XRP, it’s no wonder why investor sentiment has ramped up with these two cryptocurrencies.
Nate Geraci, co-founder of the ETF institute, believes 2025 is the “year of Crypto ETFs”, and not only could these companies get their crypto ETFs approved, but we can also expect different types of exchange-traded products for assets like Ethereum.
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José Oramas Read More