XRP and Solana ETFs Could Attract $3-8B After Approval, JP Morgan Estimates
JP Morgan has estimated that, upon approval, XRP and Solana exchange-traded funds (ETFs) could each attract investments ranging from $3 billion to $8 billion. Matthew Sigel, the Head of Digital Assets Research at VanEck, shared these projections today. The report emphasizes the potential impact of ETF approvals on the market caps and prices of XRP and Solana.
Projected Inflows and Market Impact
In comparison, JP Morgan’s report looks at the adoption rates of Bitcoin and Ethereum ETFs, which have seen similar levels of success post-approval. Bitcoin ETFs accumulated $108 billion in assets, equivalent to 6% of Bitcoin’s market cap within their first year. Similarly, Ethereum ETFs reached $12 billion in assets, accounting for 3% of Ethereum’s market cap within six months.
JP Morgan applied these rates to XRP and Solana ETFs. Notably, for XRP, with a market cap of $146.5 billion at the time of the report, a 3% influx, similar to Ethereum’s, could bring in an additional $4.3 billion, raising the market cap to $150.8 billion. Moreover, a 6% influx, akin to Bitcoin’s, could potentially add $8.4 billion, resulting in a $154.9 billion market cap. With a circulating supply of 57.5 billion tokens, XRP’s price could potentially rise from the current $2.55 to a range between $2.62 and $2.69.
Conversely, for Solana, with a market cap of $90.5 billion, a 3% influx akin to Ethereum’s could introduce an additional $2.7 billion, raising the market cap to $93.2 billion. However, a 6% influx, comparable to Bitcoin’s performance, might contribute $5.2 billion, leading to a $95.7 billion market cap. Given a circulating supply of 484 million tokens, SOL’s price could potentially increase from the current $185.8 to a range between $192.5 and $197.7.
Potential of XRP and Solana ETFs
It is crucial to note that the potential approval of XRP and Solana ETFs is still under consideration. The U.S. Securities and Exchange Commission (SEC) has been reviewing various ETF applications, with recent developments indicating a more favorable outlook.
By late 2024, several firms, including WisdomTree, 21Shares, Canary Capital, and Bitwise, submitted applications for XRP ETFs. Similarly, there has been an uptick in filings for Solana ETFs. The SEC is anticipated to make initial decisions on these filings by January 25, 2025.
Following the triumph of its Bitcoin ETF, VanEck was among the first asset managers to file for a spot Solana ETF in June 2024. Additionally, Grayscale has applied to convert its Solana Trust Fund into an ETF, with a review deadline set for January 23, 2025.
The crypto market has witnessed substantial growth, with Bitcoin’s price surpassing $100,000 subsequent to the introduction of spot Bitcoin ETFs in 2024. This success has spurred interest in ETFs for other cryptocurrencies, including Ethereum, Solana, and XRP.