Given their strong community support, the industry is debating whether Solana or XRP will receive ETF approval first. While XRP is grappling with the SEC’s legal game, Solana ETFs appear to be the safest option for SEC approval.
However, one analyst rejects the hype, and here’s his realistic check on ETF mania.
Blackrock Rebuffs SOL and XRP ETF Approval
During the inaugural day of the Bitcoin Conference 2024, BlackRock’s Head of Digital Assets, Robert Mitchnick, dismissed the approval of Solana (SOL), Ripple (XRP), and other altcoins. He cited a lack of maturity and liquidity as the primary cause, alongside regulatory concerns and the SEC’s reluctance to approve more crypto ETFs. Mitchnick emphasized that while Bitcoin and Ethereum dominate the market with significant market caps, other altcoins do not meet the necessary thresholds for liquidity and maturity required for ETF consideration.
Current State of Crypto ETFs
Despite the approval of spot Ether ETFs, their performance has been poor, with products like Grayscale’s ETHE experiencing consecutive outflows. Mitchnick also mentioned that the SEC was uncomfortable with spot Ether ETFs offering staking facilities, reflecting broader regulatory uncertainties.
Contrasting Views
Nate Geraci, President of The ETF Store, disagreed with Mitchnick’s views, highlighting that Europe already has successful ETPs for altcoins such as Solana, XRP, and Cardano. Geraci believes that similar products could be introduced in the US with appropriate regulatory adjustments, expressing optimism for future developments in the US crypto ETF market.
Matthew Sigel, head of digital asset research at VanEck, explained a valid point that the creation of an ETF requires strong support from regulators, issuers, and market players like exchanges and custodians. Currently, XRP lacks the necessary client demand and internal conviction, making regulatory approval unlikely. In contrast, Solana shows potential due to its decentralization and security, which align with the criteria needed for an ETF. The analyst is optimistic that, over time, regulators will approve these products.
BlackRock’s Q2 Performance
Amid these discussions, BlackRock reported robust Q2 earnings, with assets under management (AUM) reaching $10.6 trillion. However, despite their strong financial position, Mitchnick stressed that BlackRock does not see a near-term future for altcoin ETFs beyond Bitcoin and Ethereum due to current market conditions and regulatory hurdles.
What Next?
The SEC’s recent approval of Ethereum ETFs has created new cryptocurrency opportunities. While XRP faces several hurdles before its ETF approval, Solana meets all the necessary conditions. Even GSR wrote last month that the results suggested Solana is next, should the additional spot digital asset ETFs be permitted in the US.
Investors eagerly await regulatory decisions, hoping Solana and XRP will be the next crypto to benefit from an ETF.
With big bulls like VanEck and 21Shares openly showing interest in SOL and XRP, the market is
rooting for a year-end approval. Agree?
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