With the election of Donald Trump, a wave of enthusiasm has swept through the cryptocurrency community, particularly regarding the potential approval of Exchange Traded Funds (ETFs) focused on altcoins such as Solana, XRP, and Litecoin. This pivotal change in political leadership is perceived as a promising opportunity for the crypto sector, which has long sought favorable regulatory conditions.
Solana Gains Ground in ETF Approval Race
Unlike the previous administration under President Biden, which maintained a stringent regulatory stance on digital assets, President-elect Trump has taken a more supportive approach. His promises to nurture the growth of the cryptocurrency industry have invigorated Wall Street, leading to a renewed push for ETF applications that once seemed destined for rejection.
The US Securities and Exchange Commission (SEC) has been inundated with applications for funds that track various altcoins, including Solana, XRP, and Litecoin. This influx has generated a palpable sense of optimism within the financial community. Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, remarked that the chances for these altcoin ETFs were slim under a Harris presidency, but Trump’s election provides them with a “fighting chance.” While success is not assured, the regulatory barriers appear less formidable in this new political climate.
The cryptocurrency market has experienced a surge, buoyed by the recent approval of ETFs that hold Bitcoin and Ethereum. These ETFs have attracted substantial investments, with Bitcoin alone drawing in over $24 billion in net inflows. This momentum is anticipated to extend to altcoins, particularly Solana, which has become a focal point for institutional investors due to its competitive edge against Ethereum.
Noelle Acheson, the author of the “Crypto Is Macro Now” newsletter, predicts that Solana ETFs are most likely to gain approval, citing the token’s impressive performance and clear narrative. On the other hand, XRP faces challenges as its use case remains less understood by many investors.
Trump’s Election Spurs Crypto Market Rally
The election of Donald Trump has also had a profound impact on the cryptocurrency market, with Bitcoin experiencing a remarkable surge to new highs above $76,000. This rally reflects the optimism surrounding the potential for a regulatory landscape more favorable to digital assets.
Analysts from Bernstein forecast that regulatory changes under Trump’s leadership could propel Bitcoin’s price to an astounding $200,000 by the end of 2025. During his campaign, Trump shifted from skepticism to full support for cryptocurrencies, promising to replace SEC Chair Gary Gensler with more crypto-friendly regulators. However, the extent of Trump’s influence on the SEC, an independent regulatory body, remains uncertain.
Stephane Ouellette, co-founder and CEO of FRNT Financial, noted that while the SEC may adopt a more crypto-accommodating stance, its bureaucratic nature makes outcomes difficult to predict. Nonetheless, the anticipated departure of Gensler has already sparked a rally in cryptocurrencies previously classified as “unregistered securities.” Tokens like Uniswap (UNI) and Polygon (POL) have seen impressive price increases of 38% and 20%, respectively, surpassing Bitcoin’s 14% rise following the election results.
Additionally, the election outcomes have positively impacted Ethereum (ETH), which has risen by 21% since the election. Investors are hopeful for a more favorable regulatory environment that could lead to greater acceptance and success for Ether ETFs. However, the uncertainty surrounding whether staking yields are classified as commodities or securities complicates the development of Ether ETFs.
Jesper Johansen, CEO of the Ethereum staking platform Northstake, highlighted a significant missed opportunity for investors, noting that $6 billion in Ether ETFs is currently not being staked. This represents a considerable untapped potential in the cryptocurrency market.
As of now, Solana, which recently overtook Binance Coin (BNB) in market capitalization to become the fourth largest cryptocurrency, is trading at $196, marking a 15% increase over the past week.
