XRP, Solana, Dogecoin, Litecoin: Crypto ETFs Could Soon Become Reality
In the USA, the introduction of ETFs based on Bitcoin and Ethereum is likely, while the collective application for a spot Bitcoin ETF by the world’s largest asset managers is still undergoing approval. Now, other cryptocurrencies are coming into focus as candidates for ETFs.
ETF stands for Exchange Traded Fund, a modern financial instrument that is designed to enable secure and cost-effective trading of selected assets. At the turn of 2023 and 2024, the crypto scene expects the approval of one or more ETFs for Bitcoin in the USA, which will be based on the spot market. The U.S. Securities and Exchange Commission (SEC) will decide on the respective applications, including those by market leaders BlackRock and Fidelity, before January 10, 2024. The broad optimistic expectation is that the SEC will give the green light for EMA applications.
Meanwhile, according to a report by Bloomberg, there are new developments regarding additional cryptocurrencies. BlackRock has already identified likely candidates for more ETFs with Ethereum. Bloomberg lists XRP, Solana (SOL), Dogecoin (DOGE), and Litecoin (LTC) as under consideration. A decision on these should be made in the second quarter of 2024 at the earliest, says Bloomberg, citing insiders.
The SEC has softened its otherwise restrictive stance on cryptocurrency by clearing Etherstakes and Bitcoin futures ETFs. The new crypto ETFs in planning will each have to go through an application and approval process that typically involves working with a partner company in the crypto world. As currently structured, most asset managers rely on crypto exchanges like Coinbase, regulated under U.S. law, to ensure that spot market prices are based on robust pricing.
The unresolved litigation between the SEC and Ripple over whether XRP is considered a security and how the SEC handles it, could jeopardize an XRP ETF. The dispute has been simmering since late 2020. The SEC initially lost the main trial, which classified XRP as an investment contract, and is now waiting for the start of the appeal process. In the case of Solana, Dogecoin, and Litecoin, which are not under scrutiny in the same way, there have so far been no indications of special reservations from the SEC.
Bloomberg’s compilation indicates that asset managers are preparing to expand the range of offerings in the cryptocurrency sphere through ETFs. This should mean for XRP, Solana, Dogecoin, and Litecoin that further price surges might be imminent. If the SEC decides in favor of spot Bitcoin ETFs in early 2024, then it can be reasonably hoped that the popularity of other cryptocurrencies will increase as well. For the crypto world, the prospect of ETFs has the pleasant side effect that institutional investors and unsuspecting retail investors could enter the market even more massively.
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