Four Cryptos Likely to Get a Spot ETF

Possibly by the end of 2025.

Solana (SOL) 

Ethereum’s most popular rival — particularly for memecoin enthusiasts in recent months — remains a strong candidate to receive approval for a spot Solana ETF. 
 
Its coin has stormed back into the top 10 after collapsing to $10 in January 2023 and has managed to remain in the top 5 since making its way back in at the beginning of this year. 
 
VanEck and 21 Shares filed the first set of paperwork (an S-1 form) in June to get SEC approval for spot Solana ETFs. More companies will follow suit such as BlackRock, Grayscale, Bitwise and others that currently offer spot Bitcoin ETFs. 
 
One thing holding SOL back from being next in line is the administrative uncertainty surrounding whether it is a commodity or a security. However, there is the impetus to get the official word from the government with these above-mentioned filings.
 
If Solana isn’t assigned a standalone spot ETF to begin with, I am almost certain it will form part of a multi-crypto fund. 
 
There’s a high probability this will happen sooner rather than later, as Grayscale has put in an application to have its Digital Large Cap Fund (GDLC) converted to a spot ETF. The US SEC will decide on this matter within 45 to 90 days. 
 
Solana accounts for about 4% of the GLDC, as of the date of the related filing. 

XRP

 
This legacy crypto is the most logical option for receiving an ETF, with the US SEC finally ending its lawsuit with Ripple after nearly four years. 
 
In July 2023, Judge Analisa Torres concluded that XRP tokens sold on exchanges and algorithms (e.g., decentralised exchanges) did not violate federal securities laws. In contrast, sales to institutional investors were classified as securities.
 
https://medium.com/crypto-insights-au/xrp-shoots-up-the-rankings-following-ripple-v-sec-verdict-c18624fcef5c

Now that we have this court decision, it is a major step forward towards a potential spot XRP ETF.
 
However, Ripple isn’t fully out of the woods…yet. The SEC has to submit its paperwork by January 15, 2025, to appeal the initial court ruling. 
 
This clown show involving SEC Chair Gary Gensler’s attack on Ripple will eventually end. 
 
It would probably be available within a diversified crypto fund while waiting for approval to have its own exchange-traded product. 
 
A multi-asset fund would be more advantageous than separate ones by allowing people to gain exposure to a range of digital assets, helping them spread the risk in a highly volatile asset class.

Cardano (ADA)
 

With the antagonistic US SEC Chair, Gary Gensler, and the influence of anti-crypto politicians, coupled with the perception that Cardano is anti-VC funding, I wasn’t convinced that ADA would receive a spot ETF. 
 
However, upon further research (and with the upcoming change of guard at Washington D.C.), this is looking increasingly likely by the day. 
 
Two things stand out there: 
 
1) Charles Hoskinson recently announced in a recent live stream that he will work with US policymakers in 2025, to improve crypto policy across the country. 

“I’m going to be spending quite a bit of time working with lawmakers in Washington DC and quite a bit of time working with members of the administration to help foster and facilitate with other key leaders in (the) industry, the crypto policy.”
 
 Charles Hoskinson, 10 November 2024

This announcement sent ADA’s price flying, up by 40% in a day. ADA is still up 60% over the past seven days, sitting around 58 cents.
 
2) Cardano does have venture capital funding backing it, the main one being Emurgo Ventures. This is the VC and investment division of Emurgo, one of the three major entities behind this blockchain. 
 
Nonetheless, it still has a much higher token allocation to the public than to insiders and organisations, which is (or at least was) the case for many other base chains (L1s). 

It would be very entertaining to see a spot ADA ETF as many love to s##t on this crypto and happily argue with its devout fans.

Litecoin (LTC)
 

One of the oldest crypto assets still around — once widely regarded as the “silver to Bitcoin’s gold” — Litecoin remains a dominant altcoin despite its mediocre performance in recent years. 
 
What makes it more likely to get the all-clear from the US SEC than other crypto assets is that Litecoin shares many similarities to Bitcoin, as the former is a hard fork of the pioneering crypto asset. 
 
Litecoin is decentralised, it uses proof-of-work (PoW), has a block reward halving every 840,000 blocks (approximately every four years), has a 100% uptime since debuting in 2011, and has historically been considered a testnet for Bitcoin. 
 
These points alone should be compelling arguments to get the all-clear from the SEC. 
 
An optimistic sign for Litecoin enthusiasts is that Grayscale offers its own Litecoin Trust, with ≈$140 million of LTC under its management. Moreover, this crypto asset manager successfully managed to convert its Grayscale Bitcoin Trust to a spot ETF.

Notable mention — BNB 

I would have included this in the primary list, but after Binance’s falling out with US regulators last year — especially with the imprisonment of former CEO and co-founder, Changpeng Zhao (“CZ”) and the $4 billion resolution with the US Department of Justice — it is unlikely that the native coin of the world’s leading crypto exchange will get a spot ETF listing anytime soon. 
 
Additionally, Binance.US, a separate company from that of the international exchange, isn’t available in about a dozen US states, including New York, North Carolina and Texas. 
 
Yet, the asset is reportedly available to US citizens via eToro and Crypto.com. 

Do we need these products? Is having them a good idea for crypto? 

 
Due to the increasing range of reputable custodial and non-custodial options, retail and institutional investors aren’t obliged to use these financial instrumentals to gain direct exposure to their preferred digital assets. 
 
Some major drawcards of spot ETFs are more convenience, very high regulatory scrutiny and (potentially) more favourable tax treatment versus directly holding Bitcoin and altcoins.
 
Nonetheless, many people (myself included) prefer having an asset that can be readily traded 24/7/365 and is not limited to market hours.
 
Is having these a good idea for crypto? Yes and no; I’m leaning more toward the latter. 
 
What I find concerning is BlackRock’s increasing BTC holdings as part of its IBIT iShares Bitcoin Trust. It currently manages 467,347 BTC, representing 2.22% of Bitcoin’s max (21 million) supply. I wouldn’t be surprised if this hits one million BTC within 12 months.
 
While this sounds like a small percentage, remember that this is just one company. It has purchased nearly 100,000 BTC in one month.
 
 Let’s not forget about the thousands of corporations worldwide (in addition to other institutional investors and governments) holding or interested in boosting their BTC, ETH, or altcoin balance. 
 
I acknowledge that BlackRock and Fidelity were financial behemoths well before Bitcoin hit the scene, and relatively few people seemed to bat an eyelid. 
 
Ironically, the mainstream is allowing them to reinforce their dominance in an asset class (at least for Bitcoin) that was designed for peer-to-peer transactions without relying on a financial institution. 
 
What other cryptos should have their own spot ETFs? Are these a good idea for crypto? Comment below. 

Disclaimers

• N.B. None of this is financial advice; I am not a financial advisor. You are ultimately responsible for crypto investments, let alone in any asset class.

• The opinions expressed within this piece are my own and might not reflect those behind any news outlet, person, organisation, or otherwise listed here.

• Please do your own research before investing in any crypto assets, staking, NFTs or other products affiliated with this space.

• Bitcoin (BTC) and Ethereum (ETH) account for about 50% of my crypto portfolio at the time of writing. 

Featured image by tayhifi5 at Freepik.