- The regulatory shift supporting cryptocurrencies has sparked a surge in applications for exchange-traded funds (ETFs).
- ETF experts believe that Litecoin, Dogecoin, XRP, and Solana have the highest probability of being approved.
- Prior to the election, the approval probability for most new ETFs was less than 5%.
The Trump administration's support for cryptocurrencies has led to a surge in cryptocurrency exchange-traded fund (ETF) applications!
Which ETFs are likely to be approved by the U.S. Securities and Exchange Commission (SEC)?
According to Bloomberg Intelligence analysts James Seyffart and Eric Balchunas, the Litecoin ETF has a 90% probability of being approved by 2025.
Closely followed by:
- Dogecoin - 75%
- Solana - 70%
- XRP - 65%
Hoping to replicate the success of the Bitcoin spot ETF in 2024, fund management companies from Grayscale to Bitwise have submitted a new round of crypto ETF applications to the SEC.
The main reason for the optimistic market sentiment is the Trump administration's takeover and the appointment of officials who support cryptocurrencies, signaling a significant shift in regulatory attitude from the previous government.
Here are six potential upcoming cryptocurrency ETFs!
Litecoin 🚀
The crypto ETF with the highest approval probability!
The Litecoin ETF has the highest approval probability, mainly because the SEC is more likely to view it as a commodity, simplifying the regulatory path.
The SEC has accepted Grayscale's Litecoin Trust application in late January and Canary Capital's application on February 6.
Bloomberg analyst Eric Balchunas said earlier this year:
"The Litecoin ETF now meets all the approval requirements. With the new SEC leadership, it could become the first Altcoin ETF to list."
The SEC needs to make a final approval decision by October 2.
Dogecoin 🐕
The most beloved "meme coin" in the crypto world has a 75% approval probability, ranking second.
Similar to Litecoin, analysts attribute its high probability to its commodity-like attributes.
Grayscale and Bitwise are awaiting SEC confirmation by February 14, while the SEC's final approval deadline is October 18.
Solana 🌞
Solana ranks third with a 70% approval probability.
The applications from heavyweight institutions, including Bitwise, VanEck, and 21Shares, indicate strong institutional interest.
However, there are still questions about its regulatory classification. The SEC under Gary Gensler previously characterized Solana as a security in litigation against major crypto exchanges.
Bloomberg analyst James Seyffart said on February 6:
"The SEC may not approve a Solana ETF until the litigation and enforcement issues related to Solana are resolved."
The SEC's approval deadline is October 10.
XRP
XRP ranks fourth with a 65% approval probability.
Although five companies, including Bitwise and WisdomTree, have filed for XRP ETFs, the asset faces the biggest regulatory hurdle.
Seyffart said:
"You probably won't see an XRP ETF until the Ripple/XRP lawsuit with the SEC is fully resolved or there's an expected outcome."
He is referring to the ongoing legal dispute between the SEC and Ripple, the parent company of XRP. In 2023, Judge Analisa Torres ruled that Ripple's institutional sales of XRP violated securities laws, but its retail sales did not constitute securities transactions.
JPMorgan estimates that an XRP ETF could attract over $8 billion in inflows.
The SEC's approval deadline is October 17.
Polkadot
21Shares submitted a Polkadot ETF application in late January.
The fund will trade on Cboe BZX, with Coinbase as its custodian.
Seyffart said the market is skeptical about this application.
"This is one of the most disliked ETF applications I've seen," he said, noting that 21Shares has already launched a Polkadot ETP in Switzerland since 2021.
21Shares' application has not yet been confirmed by the SEC, and the SEC has not set a deadline for resolving this application.
HBAR (Hedera Hashgraph)
HBAR, the token of Hedera Hashgraph, ranks last as a potential new crypto ETF.
Canary Capital submitted the application on November 12, 2024.
However, Bloomberg analyst Balchunas is skeptical, believing it is not worth delving into.
"Every couple of years, there's an ETF application that I literally have to Google to understand what it's tracking," he wrote in mid-November. "This is one of those, the 'spaghetti cannon' of the post-Trump era."
The SEC has not confirmed this application or set a deadline for resolving it.
