JPMorgan has suggested that the approval of spot exchange-traded funds (ETFs) for Solana (SOL) and XRP could lead to significant new investments, potentially attracting billions of dollars. As the deadline approaches for the U.S. Securities and Exchange Commission (SEC) to make preliminary decisions on various Solana ETF applications by the end of January, expectations are high for a more favorable regulatory environment following President-elect Donald Trump’s inauguration on January 20.
In a recent report, JPMorgan estimated that Solana ETFs might attract between $3 billion to $6 billion in net assets, while XRP ETFs could gather between $4 billion to $8 billion. These projections are based on the adoption rates previously seen with Bitcoin and Ether ETFs, where Bitcoin ETFs obtained about 6% of Bitcoin’s total market capitalization, and Ether ETFs achieved a 3% adoption rate within their initial months.
The potential approval of these new crypto-based ETFs could push the respective altcoins to unprecedented highs in value. Historically, Bitcoin’s spot ETFs have been pivotal in driving up the cryptocurrency’s price, contributing to around 75% of new investment that was instrumental in reclaiming the $50,000 mark.
Despite the optimism, JPMorgan cautioned that altcoin demand is less reliable, which may challenge future projections. Outside major tokens like Bitcoin, Ether, and Solana, the crypto market is notably influenced by fluctuating investor sentiment and the popularity of new coins, which could hinder the success of ETPs for less established tokens.
As several asset managers, including VanEck, Grayscale, 21Shares, Bitwise, and Canary Capital, submit their applications for Solana ETFs, the market eagerly awaits the SEC’s decisions, with Grayscale’s application due by January 23 and others by January 25. Alejo Pinto, the founder of Solana layer-2 network Lumio, remarked that the approval of a Solana ETF in the U.S. could significantly enhance the cryptocurrency’s value, given that the possibility has not been factored into current prices due to prevailing uncertainty.