Regulation

Which Crypto ETF Will Be Approved First in 2025?

Published

2 days ago

January 3, 2025

Top Altcoins To Watch Xrp Sol Hbar And More During Etf Buzz.webp.webp

The race to secure approval for crypto ETFs is heating up as the US SEC continues evaluating applications.

Following the success of Bitcoin and Ethereum ETFs, attention has shifted to altcoins such as Solana (SOL), XRP, Litecoin (LTC), and Hedera (HBAR). Market analysts and industry insiders are debating which crypto ETF will gain approval first in 2025.

Crypto ETF’s: Rising Confidence in Solana ETFs

Polymarket, a prediction market built on blockchain, estimated an 85% chance of the US SEC approving Solana ETFs by the end of 2025. This is an upward revision from the earlier estimation of 45%, depicting enhanced confidence among the investors.

Grayscale, VanEck, and Bitwise are some of the big names in the asset management industry that have submitted proposals for Solana ETFs, which shows that more and more institutions are coming into the space. However, the recent classification of SOL as security by the US SEC in its ongoing legal battles has created some element of risk in the process. Experts say this could cause delay in approval even though there is a high demand for the two products.

Another factor that has increased confidence is the recent filing made by Volatility Shares for Solana futures ETFs. However, these futures are not currently available on regulated exchanges, but this is seen as a positive move towards the listing of Solana-based financial derivatives.

Litecoin and Hedera ETFs Seen as Frontrunners

Bloomberg analysts Eric Balchunas and James Seyffart predict that crypto ETFs such as Litecoin and Hedera ETFs are more likely to gain approval before Solana and XRP. The lack of regulatory issues makes Litecoin and Hedera advantageous, according to them.

Solana and XRP, on the other hand, have been classified as securities by the SEC, which makes their regulatory journey more challenging for them. Critics have noted that this legal certainty puts these crypto ETFs in a better position than their counterparts. Nevertheless, there is continuing institutional demand for these products, with only several filings to date, including Canary Capital’s case.

The likeness of Litecoin to Bitcoin and the effectiveness of Hedera’s hashgraph concept will be seen to draw investors’ attention once approved. These attributes may help to guarantee their approval as the next ETFs on the market, according to analysts.

XRP ETFs Face Legal Hurdles

The approval of the XRP ETF, which has hit 70% on Polymarket has been a long and winding road for XRP due to the ongoing legal battle between the US SEC and Ripple. Although Ripple secured a partial legal win, the issue of XRP being considered a security has not been fully solved.

Franklin Templeton and Bitwise are some of the several asset managers who have submitted applications for XRP ETFs, signaling their confidence in the digital asset. Nevertheless, experts estimate that the remaining legal questions may prevent the SEC from approving crypto ETFs until after the regulator’s leadership transition under pro crypto president Donald Trump.

Experts also point out that XRP’s renewed interest for cross-border payments could position it as a strong candidate for eventual ETF approval, provided legal barriers are resolved. Concurrently, the anticipated leadership change at the US SEC, with Gary Gensler stepping down in January 2025, is seen as a pivotal factor.

Analysts suggest that the new, crypto-friendly chair Paul Atkins could create a more favorable environment for ETF approvals. This change could impact the timing and order of approvals for Solana, XRP, Litecoin, and Hedera ETFs.