Following Donald Trump’s victory in Tuesday’s election, members of the crypto community are celebrating a renewed sense of hope for his or her ETF ambitions. The change in political leadership is seen as a possible turning point for the approval of cryptocurrency ETFs focused on altcoins equivalent to Solana, XRP and Litecoin.
Solana Gains Ground In ETF Approval Race
Unlike the Biden administration, which approached digital assets with ongoing enforcement actions and a hostile regulatory environment, President-elect Trump has embraced the industry with key guarantees to spur growth within the nascent financial sector.
Trump’s pro-crypto stance has encouraged Wall Street to push forward with ETF applications that had previously appeared unlikely to succeed. With the US Securities and Exchange Commission (SEC) receiving quite a few applications for funds tracking XRP, Solana and Litecoin, there’s a palpable sense of optimism within the air.
Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, noted that “these altcoin ETFs were going to be just about dead-on-arrival if Harris won, but with Trump, they not less than have a fighting probability.” While he stresses that success will not be guaranteed, the regulatory hurdles appear less daunting under the brand new administration.
The cryptocurrency market has been buoyed by the recent approval of ETFs that hold Bitcoin and Ethereum, which have attracted significant investment—over $24 billion in net inflows for Bitcoin alone.
This momentum is predicted to increase to altcoins, particularly Solana, which has garnered substantial institutional interest attributable to its competitive positioning against Ethereum.
Noelle Acheson, creator of the “Crypto Is Macro Now” newsletter, believes that Solana ETFs are most certainly to achieve approval, citing the token’s strong performance and clearer narrative. In contrast, XRP faces challenges as many investors find its use case less understood.
Trump’s Election Spurs Crypto Market Rally
Bitcoin, often perceived as a “Trump trade,” has reached latest highs above $76,000 on Thursday, reflecting the optimism surrounding the potential for a positive regulatory environment.
Analysts from Bernstein predict that the regulatory changes under a Trump administration could propel Bitcoin’s price to $200,000 by the top of 2025.
During his campaign, Trump transitioned from skepticism to full support for cryptocurrencies, promising to interchange SEC Chair Gary Gensler with regulators more favorable to digital assets.
Nevertheless, the actual influence Trump can have on the SEC, an independent regulatory body, stays uncertain. Stephane Ouellette, co-founder and CEO of FRNT Financial, identified that while the SEC might adopt a more crypto-friendly approach, its bureaucratic nature makes outcomes hard to predict.
The anticipated departure of Gensler has already spurred 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 times following the election results, outpacing Bitcoin’s 14% rise.
The election outcomes have also positively impacted ETH, which has risen 21% because the election. Investors are eager for a more favorable regulatory environment that could lead on to greater acceptance and success for Ether ETFs, which haven’t enjoyed the identical level of enthusiasm as Bitcoin ETFs.
Nevertheless, the uncertainty surrounding whether staking yields are classified as commodities or securities complicates the event of Ether ETFs.
Jesper Johansen, CEO of Ethereum staking platform Northstake, highlighted that $6 billion in Ether ETFs is currently not being staked, representing a major missed opportunity for investors.
On the time of writing, Solana, which is now the fourth largest cryptocurrency in the marketplace after overtaking Binance Coin (BNB) when it comes to market cap earlier this week, is trading at $196, up 15% on the week.
Featured image from DALL-E, chart from TradingView.com