The approval of new cryptocurrency exchange-traded products (ETPs) could unlock substantial investment, according to financial heavyweight JPMorgan.
Anticipation is growing among investors for the first-ever spot Solana and XRP ETFs, buoyed by expectations that a more favorable regulatory environment could emerge in the United States following the upcoming inauguration of President-elect Donald Trump on January 20.
In a January 13 report shared, JPMorgan highlighted the potential for these ETFs to outshine spot Ether ETFs in their initial six months of trading.
“When applying historical adoption trends, we estimate Solana could draw between $3 billion and $6 billion in net assets, while XRP could bring in $4 billion to $8 billion,” the report stated.
Significant Potential for Altcoin ETFs
This forecast follows the milestone anniversary of spot Bitcoin ETFs in the U.S., which reached nearly $110 billion in cumulative holdings by January 2, as reported. Bitcoin ETFs previously played a pivotal role in driving the cryptocurrency past the $50,000 mark, with ETF-driven investment accounting for approximately 75% of Bitcoin’s new inflows during that period.
New altcoin-focused ETFs could similarly push underlying assets like Solana and XRP to record highs, though demand for such products remains somewhat uncertain.
Adoption Rates Shape Expectations
While Bitcoin and Ether ETFs have seen notable adoption—6% and 3% of their respective market capitalizations within their first six months—JPMorgan cautioned that altcoins often face more fluctuating investor demand.
“Beyond core cryptocurrencies like Bitcoin, Ether, and Solana, the market’s volatility is influenced by varying sentiment and the appeal of emerging tokens that often see only temporary interest,” the report noted. “We believe tokens with limited market depth are unlikely to sustain a viable ETP.”
SEC Decisions Loom for Solana ETFs
The fate of several Solana ETF applications hangs in the balance as the U.S. Securities and Exchange Commission (SEC) approaches decision deadlines. Applications from major players like VanEck, Grayscale, 21Shares, Bitwise, and Canary Capital are awaiting SEC rulings later this month, with Grayscale’s deadline on January 23 and others following closely by January 25.
According to Alejo Pinto, founder of the Solana layer-2 network Lumio, ETF approval could significantly impact Solana’s market performance.
“Given the current uncertainty, a green light for a Solana ETF in the U.S. would likely have a positive price impact, as it hasn’t yet been factored into the market,” Pinto said.
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