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02/08 16:18

XRP & Solana race toward the next crypto ETF appro

XRP & Solana race toward the next crypto ETF approval

XRP and Solana are both making strides toward securing approval for their own spot exchange-traded funds (ETFs), each with a compelling case to be the first to cross the regulatory finish line.

Both XRP and Solana have recently seen major ETF-related developments. The US Securities and Exchange Commission formally acknowledged a Solana-based ETF application on Feb. 6, the same day four fund managers joined the line for XRP ETF applications.

On Polymarket, traders currently give Solana ETFs the edge, with an 85% chance of approval in 2025, compared with XRP’s 80%. However, betting volumes remain relatively low, with $34,748 staked on XRP (listed as “Ripple”) and $65,761 on Solana at the time of writing.

More activity has emerged around a nearer-term deadline. For an ETF approval by July 31, bettors have wagered $207,980 on Solana, with odds at 36%. Meanwhile, XRP has drawn $102,069 in bets, with a higher 40% probability.

A few years ago, the idea of an XRP or Solana ETF would have been dismissed outright, but the script has flipped since the SEC approved spot Bitcoin ETFs in January 2024, followed by Ether products.

Now, US regulatory winds are shifting in favor of crypto. The end of Gary Gensler’s term as SEC chair concluded an era defined by what critics call “regulation by enforcement.” The US now has what market watchers are calling the first crypto-friendly president, Donald Trump, who took office on Jan. 20. 

Solana’s path to ETF approval

Several factors have Polymarket betters predicting Solana has a better chance than XRP at being approved for an ETF first. For one, the SEC’s Feb. 6 acknowledgment of Grayscale’s application to convert its Solana Trust into an ETF has set an October deadline for a decision.

Beyond regulatory momentum, Solana’s strong network activity over the past year further strengthens its case. The blockchain has proven itself as a reliable network for transactions and smart contracts, most notably becoming the go-to chain for the recent memecoin trading frenzy, which saw billions in trading volume.

“This distinction is crucial,” Yuriy Brisov, a securities lawyer at Digital & Analogue Partners, told Cointelegraph. “If an asset’s primary purpose is operational rather than investment-oriented, it could more readily avoid the pitfalls of securities regulation.”

However, Solana remains entangled in securities-related legal challenges. In January, James Seyffart, an analyst at Bloomberg Intelligence, predicted that an SEC approval for a Solana ETF may not come until 2026 due to ongoing lawsuits against major exchanges. The SEC’s Enforcement Division claims SOL is a security, which has prevented other divisions of the agency from considering it as an underlying asset for a commodities ETF.

According to The New York Times, the SEC is in the process of reducing its crypto enforcement capabilities by reassigning 50 lawyers.

Why XRP could win the ETF race

Gensler’s tenure as SEC chair was widely criticized for alleged regulatory overreach against crypto firms, but it also set key precedents in landmark cases, including Ripple Labs’ partial victory against the SEC.

During his time as chair, Gensler’s SEC aggressively pursued enforcement actions against crypto firms, targeting major exchanges like Coinbase and Bina, and classified numerous digital assets — including SOL, Cardano’s ADA , and Polygon’s POL — as unregistered securities. 

His approach, often described as “regulation by enforcement,” drew backlash from industry leaders, lawmakers and even some SEC commissioners, who accused the agency of stifling innovation and failing to provide clear guidelines for crypto companies.

One of the most significant legal setbacks for the SEC came in July 2023, when US District Judge Analisa Torres ruled that XRP itself is not inherently a security, and that only its institutional sales constituted securities transactions under the Howey test.

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