- The SEC’s refusal to approve altcoin ETFs is mainly due to the lack of regulated futures markets, with approval potentially delayed until late 2025.
- While approval depends on SEC leadership changes, there’s cautious optimism that staking and pro-crypto policies could accelerate ETF approvals for altcoins.
Following the previous SEC delays in Solana ETFs, reported by CNF, Bloomberg analyst James Seyffart recently suggested that approval for Solana (SOL), XRP, Litecoin (LTC), and Hedera (HBAR) ETFs may not happen until late 2025 due to current regulatory hurdles.
The SEC‘s refusal to approve altcoin ETFs stems from the absence of regulated futures markets for these cryptocurrencies. Seyffart stated that:
Without a regulated market of significant size, the SEC has historically denied altcoin ETF applications.
While Bitcoin and Ethereum ETFs progressed due to their association with CME-regulated markets, altcoin ETFs face stricter scrutiny. Seyffart highlights that upcoming SEC leadership changes could shift this stance, potentially accelerating approvals.
It’s important to note that recent XRP ETF filings, like WisdomTree’s “XRP Fund,” mark a step forward, though regulatory restrictions on custody, market manipulation, and compliance remain barriers.
Staking for altcoins, including XRP and SOL, could become integral to ETF products if a pro-crypto administration leads the SEC in 2025. Seyffart notes that this shift would boost demand for altcoin ETFs but acknowledges that current structures don’t permit staking within ETFs.
Future Path for Multi-Asset ETFs
While approvals for altcoin ETFs hinge on leadership changes and SEC reforms, Seyffart remains cautiously optimistic, forecasting potential decisions in 2025 depending on regulatory evolution.
Seyffart also discussed index ETFs holding multiple cryptocurrencies, such as Grayscale’s GDLC, which primarily invests in Bitcoin and Ethereum. These products may face fewer regulatory issues if altcoin allocations remain minimal.
Previously, CNF reported that Solana (SOL) and Ripple (XRP) hope the approval of their ETFs will boost their prospects for a 1,000% surge as the ETFSwap (ETFS) tokens begin a 150x price rally. Currently, at the time of writing, Solana (SOL) is trading at $238.81, with a decrease of 5.94% in the past day and 1.20% in the past week.
