Emily Walker
After Donald Trump’s win in the recent election, many in the cryptocurrency community feel rejuvenated about their hopes for exchange-traded funds (ETFs). The new political leadership brings a sense of possibility about getting approval for ETFs linked to altcoins like Solana, XRP, and Litecoin.
Solana Emerges as a Contender for ETF Approval
In contrast to the Biden administration’s stringent enforcement of regulations regarding digital assets, President-elect Trump has adopted a more supportive approach, making promises to foster growth in this emerging financial ecosystem.
Trump’s pro-cryptocurrency position has motivated Wall Street to pursue ETF applications that previously seemed unlikely to gain approval. With the U.S. Securities and Exchange Commission (SEC) reviewing multiple ETF applications for XRP, Solana, and Litecoin, the atmosphere is filled with optimism.
Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, stated that “these altcoin ETFs would have been nearly impossible to get off the ground under Harris, but now they stand a chance.” Despite noting that approval isn’t assured, he emphasized that regulatory challenges seem less imposing with the new administration.
The cryptocurrency marketplace has seen increased activity following the approval of Bitcoin and Ethereum ETFs, which have drawn in considerable investments, exceeding $24 billion in net inflows for Bitcoin alone.
This positive trend is likely to influence altcoins, especially Solana, which has attracted significant interest from institutional investors due to its strong comparison to Ethereum.
Noelle Acheson, author of the “Crypto Is Macro Now” newsletter, believes Solana ETFs have the best chance for approval thanks to the token’s performance and clear narrative. Meanwhile, XRP struggles due to a less understood use case among many investors.
Trump’s Election Triggers Crypto Market Surge
Bitcoin, often seen as a “Trump trade,” has surged to new heights above $76,000, reflecting the hopeful sentiment about a potentially favorable regulatory landscape.
Analysts at Bernstein predict that regulatory shifts under a Trump administration could boost Bitcoin’s value to $200,000 by the end of 2025.
Throughout his campaign, Trump shifted from being skeptical about cryptocurrencies to embracing them fully, vowing to replace SEC Chair Gary Gensler with regulators who are more amiable towards digital currencies.
Nonetheless, how much influence Trump will truly have over the SEC, which operates independently, remains to be seen. Stephane Ouellette, co-founder and CEO of FRNT Financial, mentioned that while there may be a shift towards a more crypto-supportive SEC, the unpredictable nature of bureaucracy complicates forecasts.
The expected departure of Gensler has already influenced a surge in cryptocurrencies that were previously deemed “unregistered securities.” For example, tokens like Uniswap (UNI) and Polygon (POL) have seen substantial price gains of 38% and 20%, respectively, within days of the election, surpassing Bitcoin’s 14% increase.
The election results have also provided a boost to ETH, which has grown 21% since then. Investors are optimistic for a better regulatory outlook that could enhance the acceptance and success of Ether ETFs, which have not received the same level of enthusiasm as their Bitcoin counterparts.
However, the vagueness about whether staking yields are classified as commodities or securities complicates the development of Ether ETFs.
Jesper Johansen, CEO of Ethereum staking platform Northstake, emphasized that $6 billion in Ether ETFs is currently unutilized in staking, marking a significant opportunity lost for investors.
At present, Solana, now the fourth largest cryptocurrency by market cap after surpassing Binance Coin (BNB) earlier this week, trades at $196, marking a week-over-week increase of 15%.
Featured image from DALL-E, chart from TradingView.com