According to a British multinational bank, Solana (SOL) and XRP are expected to soon have their own exchange-traded funds (ETFs). In a Friday note, the bank’s digital assets researcher indicated that these developments are on the horizon.
The SEC recently approved eight spot Ethereum ETFs. This groundbreaking decision allows traditional investors to purchase shares tracking the price of Ethereum, the second-largest digital asset. This approval comes after the SEC greenlit spot Bitcoin ETFs earlier this year in January.
SOL and XRP ETFs
Geoffrey Kendrick, who leads crypto research and emerging market foreign currencies at Standard Chartered, believes that other significant digital currencies will eventually attain ETF status. He stated that the market will anticipate the ETF status for other coins such as Solana and XRP, although this is more likely to occur in 2025 rather than 2024.
Kendrick pointed out that several other coins, which the SEC has previously categorized as securities, are fundamentally similar to Ethereum. Therefore, it would be challenging for the SEC to label them as securities given Ethereum’s current classification.
Initially, industry analysts and observers were skeptical about the approval of spot Ethereum ETFs this week, given the SEC’s previous reluctance to engage with asset managers proposing these funds. However, fund managers began amending their paperwork to expedite the process amidst rumors of a potential shift in the SEC’s approach. By Thursday afternoon, the SEC had approved the Ethereum ETFs.
This approval is surprising, especially considering the SEC’s stringent stance on the crypto industry, which some lawmakers have criticized as excessively harsh. A notable lawsuit against the SEC even claimed that the regulator aimed to classify Ethereum as a security rather than a commodity.
In 2023, Ripple, the company behind XRP, achieved a partial victory against the SEC when a judge ruled that the programmatic sales of XRP to retail investors were not securities, countering the SEC’s allegations. However, the judge did determine that $728 million in institutional sales contracts were unregistered securities. Despite this, the industry viewed the ruling as favorable.
Under SEC chair Gary Gensler, the regulator has identified numerous coins and tokens as securities, asserting that their sales to investors are illegal. Kendrick also mentioned in his note that Ethereum’s price is expected to reach $8,000 per coin by the end of the year.
Previously, Kendrick had predicted that Bitcoin could hit $150,000 per coin by the end of 2024. He reaffirmed this projection today, citing the ongoing success of the ETFs as a contributing factor.
SOL Price action
As of late May 2024, Solana (SOL) has been going through notable fluctuations in its price behavior. Currently trading around $165 on Gate.io, Solana has seen a slight decrease of approximately 2% over the past 24 hours. Despite these short-term declines, the cryptocurrency has shown impressive growth over the past year, with a substantial increase of over 750%.
The trading volume on Solana’s decentralized exchanges has recently dipped, largely due to a decline in memecoin trading, which had previously driven volumes to record highs. This reduction in trading activity has also contributed to a slight downtrend in Solana’s price. Additionally, the open interest in Solana contracts has decreased, signaling a potential bearish trend as liquidity exits the market.
Overall, the market sentiment for Solana remains cautiously optimistic, with analysts predicting that it could reach new heights in the future, especially if institutional interest continues to grow, the broader cryptocurrency market remains strong and ETFs show up on the horizon.
XRP Price Analysis
Ripple’s XRP has been experiencing mixed price behavior. Currently priced around $0.53 XRP/USDT, it has seen a slight decline of approximately 1.5% over the past 24 hours. However, it has shown some resilience, maintaining a positive trend with a 12.68% increase since the beginning of the year.
The ongoing legal battle between Ripple and the SEC continues to influence XRP’s price movements. Recently, the SEC filed its opposition to Ripple’s motion to strike new expert materials, which has added to the uncertainty around XRP’s regulatory status. Despite these legal challenges, Ripple has made significant strides in technology adoption and strategic partnerships, including collaborations with African payments company Onafriq and the National Bank of Georgia for a CBDC pilot program.
Market analysts have a cautiously optimistic outlook for XRP. Some forecasts suggest a potential rise to $0.77 in the short term, while others predict a decline to around $0.60 by the end of March. Long-term projections are more favorable, with expectations of XRP reaching $1.27 by the end of 2024 and potentially higher in subsequent years, driven by increased adoption of Ripple’s technology and potential regulatory clarity.
Overall, while the short-term outlook for XRP remains uncertain due to legal and market volatility, the long-term prospects appear promising as Ripple continues to expand its technological and strategic footprint in the financial sector.
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