Solana and XRP ETPs Poised for Significant Inflows, Reports JPMorgan

By: Eva Baxter

JPMorgan analysts have projected that exchange-traded products (ETPs) linked to Solana (SOL) and XRP could potentially draw in over $15 billion in net inflows. This optimistic forecast stems from a comparative analysis with the high market inflows seen in Bitcoin (BTC) and Ethereum (ETH) ETPs. Solana is expected to welcome inflows ranging from $3 billion to $6 billion, while XRP could see between $4 billion and $8 billion. Such projections highlight a robust potential for these altcoins despite the hurdles they face in the US regulatory landscape.

Historically, Bitcoin ETPs amassed $108 billion in assets within their first year, translating to 6% of Bitcoin's market cap at the time. Similarly, Ethereum ETPs reached $12 billion in assets, accounting for 3% of Ethereum's market cap. Utilizing these Ethereum and Bitcoin trajectories as benchmarks, analysts anticipate substantial investor interest in Solana and XRP, albeit these assets face unique challenges in obtaining ETP approval.

The current state of Solana and XRP ETPs reveal a promising yet challenging scenario. Solana-tied ETPs manage around $1.6 billion in assets, while XRP products hold $910 million. Still, the anticipated growth in their ETPs might stall as prospects for ETFs indexed to these cryptocurrencies remain low in the US market. Meanwhile, coins like Litecoin (LTC) and Hedera (HBAR) are more likely to secure ETF approval due to their classification and regulatory standing.

Leading ETF analysts maintain that although an influx of new crypto ETFs is expected, approval for Solana and XRP remains uncertain. The U.S. Securities and Exchange Commission (SEC) continues to reject Solana-tied ETFs, and Ripple Labs, behind XRP, is embroiled in legal disputes regarding its classification as a security. Consequently, while significant inflows are feasible, Solana and XRP may face regulatory roadblocks that could delay or diminish their potential growth.