Following Donald Trump’s victory in Tuesday’s election, members of the crypto community are celebrating a renewed sense of hope for their ETF ambitions. The change in political leadership is seen as a potential turning point for the adoption of cryptocurrency ETFs focused on altcoins such as Solana, XRP and Litecoin.
Solana Gains Ground in ETF Approval Race
Unlike the Biden administration, which approached digital assets with continued enforcement actions and a hostile regulatory environment, President-elect Trump has embraced the sector with most important promises to stimulate growth in the emerging financial sector.
Trump’s pro-crypto stance has encouraged Wall Street to move on ETF applications that previously seemed unlikely. With the US Securities and Exchange Commission (SEC) receiving numerous applications for funds tracking XRP, Solana and Litecoin, there is a palpable sense of optimism in the air.
Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, noted that “these altcoin ETFs would be virtually dead on arrival if Harris won, but with Trump they at least have a fighting chance.” While he emphasizes that success is not guaranteed, regulatory hurdles appear to be less severe under the new administration.
The cryptocurrency market is buoyed by the recent approval of ETFs containing Bitcoin and Ethereum, which have significant investment– over $24 billion in net inflows for Bitcoin alone.
This momentum is expected to extend to altcoins, especially Solana, which has attracted significant institutional interest due to its competitive position against Ethereum.
Noelle Acheson, author of the newsletter ‘Crypto Is Macro Now’, believes Solana ETFs are the most likely to gain approval, citing the token’s strong performance and clearer story. In contrast, XRP faces challenges as many investors find its use case less understood.
Trump’s election is fueling the crypto market’s rally
Bitcoin, often seen as a “Trump trade,” hit new highs above $76,000 on Thursday, reflecting optimism around the potential for favorable price movement. regulatory environment.
Bernstein analysts predict that regulatory changes under the Trump administration could push Bitcoin’s price to $200,000 by the end of 2025.
During his campaign, Trump shifted from skepticism to full support for cryptocurrencies, promising to replace SEC Chairman Gary Gensler with regulators more favorable to digital assets.
However, the actual influence Trump could have over the SEC, an independent regulatory body, remains uncertain. Stephane Ouellette, co-founder and CEO of FRNT Financial, pointed out that while the SEC could take a more crypto-friendly approach, its bureaucratic nature makes outcomes difficult to predict.
Gensler’s expected departure has already led to a rally in cryptocurrencies previously categorized as “unregistered securities.” Tokens like Uniswap (UNI) and Polygon (POL) have seen price increases of 38% and 20% respectively in the days following the election results, surpassing Bitcoin’s 14% gain.
The election results have also had a positive impact on ETH, which has risen 21% since the election. Investors are hopeful of a more favorable regulatory environment that could lead to greater adoption and success of Ether ETFs, which have not enjoyed the same enthusiasm as Bitcoin ETFs.
However, uncertainty over whether staking returns are classified as commodities or securities complicates the development of Ether ETFs.
Jesper Johansen, CEO of Ethereum staking platform Northstake, highlighted that $6 billion worth of Ether ETFs are currently unstaked, which represents a significant missed opportunity for investors.
At the time of writing, Solana, which is now the fourth largest cryptocurrency on the market after overtaking Binance Coin (BNB) in terms of market capitalization earlier this week, is trading at $196, up 15% on the week.
Featured image of DALL-E, chart from TradingView.com