After the successful launch of both Bitcoin’s new spot ETFs (Cryptography: BTC) and Ethereum (Encryption: ETH) It’s probably not surprising that last year and this year they are trying to offer investors a wider range of single crypto ETFs.
Now, the three top prospects look like XRP (Cryptography: XRP)Solana (Cryptography: Sol)and litecoin (Cryptography: LTC). But which of these cryptography is worthy of the location of your portfolio?
With a market capitalization of $130 billion, XRP is at the top of the wish list for many crypto investors, and as the fourth largest cryptocurrency, XRP is at the top of the wish list. Already, a few different investment companies have submitted applications to the SEC to offer Spot XRP ETFs.
Image source: Getty Images.
However, there are things to consider, not just investors’ needs. This is because Ripple, the company behind the XRP Crypto token, is engaged in a long-standing legal dispute with the SEC over whether XRP is actually security. More than four years later, this issue has not yet been resolved, and traditional wisdom is that XRP ETFs will not be approved until the situation involving XRP, Ripple and SEC are fully organized.
The good news is that if you’re thinking about investing in XRP, a new custody approach from the SEC under the Trump administration could potentially disappear all these regulatory issues overnight. According to Bloomberg, there is a 65% chance that XRP will acquire a Spot ETF this year. JPMorgan Chase already predicts that if that happens, $8 billion could flow to XRP.
Next up is Solana ranked as the sixth largest cryptocurrency, with a market capitalization of $70 billion. It has emerged as a clear No. 1 challenger for Ethereum in the Layer 1 blockchain space, and until recently it appeared to be fired in every cylinder. Added new users, transaction activity was off-chart and was rapidly expanding in the world of distributed financial finance (DEFI).
However, in February, meme coin bubbles explode and defeat almost every meme coin launched on the Solana blockchain, including Donal Na Trump and Melania Trump meme coins. As a result, Solana has been suffering severe assault, a 52% drop since the inauguration.
This raises a very relevant question. Do regulators really approve of a spot ETF of cryptocurrency that is facing a vortex of controversy like this? It’s not even a problem either that SEC proposed in June 2023 that Solana (as well as XRP) could actually be security.
That being said, Bloomberg still gives the Solana ETF a 70% chance of approval. JPMorgan Chase believes it could flow into as much as $6 billion in Solana as a result.
The story continues
The third top prospect who may receive a Spot ETF is Litecoin. What makes Litecoin attractive as an ETF prospect is the fact that regulators seem unanimous that Litecoin is a product rather than a security. So unlike XRP and Solana, there are no known regulatory issues that swirl around it.
As a result, Bloomberg currently predicts that Litecoin’s SpotETF has a 90% chance of approval. Two companies, Canary and Grayscale, have already submitted applications to the SEC, and the current idea is that Litecoin ETFs can begin trading in mid-July.
But when it becomes available, are investors really going to buy it? XRP and Solana have shown potential to increase value over the past two years, but Litecoin is not. Litecoin has risen nearly 30% this year, but has been a consistently lower-market performer.
It’s easy to get excited about the outlook for the new Spot Crypto ETF. The traditional idea is that the launch of these ETFs will be embraced by new investors, bringing liquidity to the crypto market, justifying the idea of investing in cryptocurrency, and helping to reduce overall regulatory risk.
So why isn’t it Black Rock? (NYSE: BLK)a recognized market leader when it comes to Crypto ETFs and are planning to launch new spot ETFs for other cryptocurrencies? I have not submitted an ETF application for XRP, Solana, or Litecoin yet.
Considering that the Isshares Bitcoin Trust is (NASDAQ: IBIT) With over $50 billion in assets accumulated from investors, it seems easy to follow up on that success with more ETFs. However, if you listen carefully to what BlackRock’s top executives say, certain themes will emerge. Institutional investors see clear investment papers for investing in Bitcoin (“digital gold”), but it is less clear that the investment papers belong to other cryptocurrencies.
That being said, all eyes need to be in the SEC these days. The first signs of 2025 are positive, and that’s why so many expectations are built up in these new ETFs. It seems like it’s not a case where it’s really approved, but when.
With the arrival of new spot ETFs this year, they will finally be able to launch the much-anticipated Cryptoble Market in 2025. Adding XRP or Solana to your portfolio may be one way to benefit from this expected rally.
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Dominique Baslutt holds positions in Bitcoin, Ethereum and Solana. Motley Fools have positions in Bitcoin, Ethereum, Solana and XRP and recommend it. Motley Fools have a disclosure policy.
Spot Crypto ETF Watch: The following three possible cryptocurrencies on the SEC approval list were originally published by Motley Fool
