Insights on the Evolving Crypto ETF Landscape
In an interview hosted by Kyle Chasse, Bitwise CIO Matt Hougan and Bloomberg ETF analyst James Seyffart shared insider perspectives on the evolving crypto Exchange Traded Fund (ETF) landscape. They noted how the approval of Bitcoin (BTC) and Ethereum (ETH) ETFs in 2024 marked a turning point, with the Bitcoin ETF becoming the largest in history.
Now, under the leadership of SEC Chair Paul Atkins, the crypto community eagerly awaits potential approvals for both Solana (SOL) and Ripple (XRP) ETFs. Kyle posed the big question: “If Solana and XRP ETFs were approved on the same day, which one would attract more inflows?”
Insights on ETF Inflows
Both experts gave nuanced responses. They noted how we’ve already seen similar scenarios in futures-based products. “We had a kind of situation where Solana futures and leverage-based ETFs launched before XRP versions, yet the XRP products ended up getting more assets and flows than the Solana ones,” Seyffart explained.
They emphasized that derivatives-based ETFs typically don’t attract the same level of demand as spot ETFs, noting that a pseudo-spot product from Rex Osprey, which offers Solana exposure with staking, has already performed well.
He then explained that while XRP would likely capture more inflows in the short term due to its strong retail following, Solana has the potential to surpass it in the long run as institutional interest and market narratives evolve.
The discussion also touched on institutional perspectives, where Solana appears to have a slight edge. “From conversations I’ve had, more serious investors and institutional players lean towards Solana and Ethereum. That’s not to say there aren’t institutional people looking at XRP, but interest tilts more toward Solana,” Hougan explained.
They pointed out that XRP has strong retail support. “Anyone who doesn’t know much about blockchain but has heard of crypto often mentions XRP. Many think it’s going to be the back-end settlement system for banks worldwide.”
Still, retail passion can’t be underestimated. Matt then explained that the level of passion behind the XRP is undeniable. He referenced an XRP conference that he attended in Las Vegas, held on a Saturday that drew 1,200 attendees and filled every seat, an impressive turnout rarely seen for most other crypto projects.
SEC Decisions and New ETF Launches
Regulatory developments are moving quickly. The U.S. Securities and Exchange Commission initially granted approval on July 23 for Bitwise’s 10 Crypto Index Fund to convert into an exchange-traded fund, only to pause the approval shortly after.
This fund offers exposure to several major cryptocurrencies, including Bitcoin, Ethereum, XRP, and Solana. In another ETF development, ProShares has launched two leveraged ETFs designed to track the daily performance of major altcoins, the ProShares Ultra Solana ETF (SLON) and the ProShares Ultra XRP ETF (UXRP).
In January, JPMorgan predicted that XRP and Solana ETFs could attract between $3 billion and $8 billion in net assets once they receive regulatory approval, following similar adoption trends seen with Bitcoin and Ethereum ETFs.
At the time of writing, Solana is trading at $189.39, up 3.5% in the past 24 hours despite a 39% drop in trading volume to $6.4 billion.
XRP is also on the move, climbing 1.55% to $3.18, with trading activity slightly down by 18%.
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