JPMorgan Chase & Co. predicts that the approval of spot Solana (SOL) and XRP exchange-traded funds (ETFs) in the US could trigger significant investment inflows.
The report, released on January 13th, projects that SOL ETFs could attract between $3 billion and $6 billion in net new assets, while XRP ETFs could gather between $4 billion and $8 billion. These estimates are based on the successful adoption of Bitcoin and Ether ETFs, which have seen significant inflows since their launch.
Uncertainties Remain
While these projections are promising, the report acknowledges the inherent uncertainties surrounding altcoin demand. Unlike Bitcoin and Ether, which have established themselves as major cryptocurrencies, the demand for other altcoins can be more volatile and subject to market trends.
Regulatory Landscape Shifting
The potential approval of these ETFs comes amidst expectations of a more crypto-friendly regulatory environment under the incoming US administration. The first anniversary of US spot Bitcoin ETFs saw significant inflows, with ETFs accounting for about 75% of new investment when Bitcoin reclaimed the $50,000 mark.
Solana ETF Applications Under Review
Several major asset managers, including VanEck, Grayscale, 21Shares, Bitwise, and Canary Capital, have submitted applications for Solana ETFs to the US Securities and Exchange Commission (SEC). The SEC is expected to make preliminary decisions on these applications by the end of January.
Potential Impact on Solana
Alejo Pinto, founder of Solana layer-2 network Lumio, believes that an ETF approval could significantly impact Solana's price. "Since it is still very uncertain, an ETF approval in the US would have a positive price impact on Solana since the probability is low and therefore not yet priced in," he stated.
January 2025, Cryptoniteuae