ETFs
XRP, Solana and Cardano ETFs Could Be Next, Ripple CEO Predicts
Ripple CEO Brad Garlinghouse recently expressed his belief that XRP, Solana (GROUND), and Cardano (ADA) could be the next cryptocurrencies to see exchange-traded funds (ETFs) on the market.
Speaking at Consensus 2024, Garlinghouse shared his optimistic outlook following the U.S. Securities and Exchange Commission’s (SEC) approval of Bitcoin (BTC) spot ETFs and the progress of Ethereum (ETH) ETFs.
Will XRP, Solana and Cardano be the next ETFs?
Garlinghouse’s confidence stems from the SEC’s approval of Bitcoin and Ethereum ETFs, which set a precedent that could pave the way for more diversified crypto ETFs. He sees the move as increasing the acceptance and recognition of cryptocurrencies within the financial sector.
“I think it’s just a matter of time, and it’s inevitable that there will be an XRP ETF, there will be a Solana ETF, there will be a Cardano ETF, and that’s great,” Garlinghouse declared.
His view is consistent with his previous statements. In February, Garlinghouse claimed that the approval of Bitcoin ETFs marked the start of wider acceptance of crypto ETFs. He believes that such financial products could help diversify investment portfolios and reduce exposure to risk.
Other industry experts share Garlinghouse’s enthusiasm, although opinions vary as to which cryptocurrencies might follow. Brian Kelly, CEO of digital currency investment firm BKCM, recently suggested that approval of Ethereum spot ETFs could provide clearer regulatory frameworks, potentially leading to more crypto ETFsincluding Solana.
However, the path to an XRP ETF comes with its own challenges. Ripple’s ongoing legal battle with the SEC sowed doubt about its immediate viability. Joe McCann, CEO of crypto investment firm Asymmetric, highlighted these concerns.
“I’m a big bull Solana. […] I think Solana will be next [for ETFs]. Certainly, the Coinbase lawsuit contains elements that could impact this, but it seems unlikely. If you look at XRP, there is some history with the SEC. So, I don’t know if that will be the ETF that comes next,” McCann commented.
Learn more: Crypto ETN vs Crypto ETF: What is the difference?
McCann also highlighted considerable interest from the traditional financial sector (TradFi) in Solana, driven by its perceived potential and favorable price developments. He mentioned that TradFi entities view Solana as a promising investment, especially after missing out on Ethereum’s previous growth cycles. This sentiment reinforces his belief that Solana is a strong candidate for the next ETF.
Regulatory hurdles and skepticism surround future crypto ETFs
Despite these positive signals, some remain cautious. Nikolaos Panigirtzoglou, managing director and global market strategist at JPMorgan, expressed skepticism about the SEC’s approval of crypto ETFs beyond Bitcoin and Ethereum.
“We doubt it. The SEC’s decision to approve ETH ETFs is already pushed given the ambiguity over whether Ethereum should be classified as a security or not. We do not believe the SEC would go even further in approving Solana or other tokenized ETFs given that the SEC has a stronger view (compared to Ethereum) that tokens outside of Bitcoin and Ethereum should be classified as titles”, Panigirtzoglou declared.
Panigirtzoglou added that legislative changes may be needed for broader ETF approvals. If U.S. policymakers pass laws clarifying that most cryptocurrencies are not securities, the SEC may be more inclined to approve other crypto ETFs. However, such regulations have yet to be put in place.
Felix Mohr, managing partner at MohrWolfe, shares a similar view. He highlights the need for a solid legal strategy for companies launching blockchain-based financial products and emphasizes that companies need substantial legal resources, particularly in the United States.
“It might be more prudent to build products around the Bitcoin blockchain, whether or not it is clear whether or not it is a commodity or a security,” Mohr told BeInCrypto.
The recent approval of Ethereum spot ETFs has reinvigorated the crypto market, although the process is still ongoing. Potential issuers are awaiting final approval from the SEC before these products can begin trading.
Ethereum ETFs are particularly interesting because Ethereum uses a Proof of Stake (PoS), which allows validators to earn staking rewards. Initially, companies seeking to issue these ETFs included staking features in their applications.
However, the SEC has asked these companies to revise their 19-4b and S-1 filings. to exclude staking features. After preliminary approval, companies like VanEck and BlackRock have already updated their S-1 filings.
Learn more: Ethereum ETF explained: what it is and how it works
As the regulatory environment continues to evolve, the potential for new crypto ETFs remains a topic of intense interest and speculation within the industry.
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