Bitcoin ETFs outperform in first year, experts say, but Solana and XRP ETFs face challenges

Bloomberg Intelligence Analyst James Seifert reflects the significant success of the site Bitcoin Bitcoin/USD ETFs and potential issues with altcoin ETF approval in 2025.

What happened: In a recent Blockworks Macro show, Seyffart noted that there are currently four Bitcoin ETFs among the 20 ETFs ever launched, with iShares’ IBIT Lead the way.

He emphasized that these ETFs attracted US$37 billion in net inflows in the first year, far exceeding the initial estimate of US$15-20 billion.

Seyffart also pointed out that the launch of Bitcoin ETF options is promising, which may pave the way for a strong ecosystem of derivative ETF products.

Altcoin ETFs: “When, not if”

While optimistic about the approval of altcoin ETFs under a more pro-crypto government, Seyffart warned that the process could face delays.

He stressed that approval was a matter of “when, not if” but hurdles remained, especially for an asset like this Solana Sol/USDwhich the U.S. Securities and Exchange Commission had previously labeled as a security.

Seyffart added that regulatory headwinds, while easing under new leadership, could still slow the progress of altcoin ETFs.

Also Read: Bitcoin ETF Heads into 2025 After Massive First Year

Challenges faced by altcoin ETF review

• Lack of futures contracts: Unlike Bitcoin and Ethereum ETFs that benefit from CME futures contracts, altcoins such as Solana lack similar tools. The SEC may need to rely on regulatory sharing agreements (SSA) with exchanges, complicating the approval process.
• SEC Litigation and Classification: Ongoing litigation against cryptocurrency exchanges and the U.S. Securities and Exchange Commission’s classification of certain altcoins as securities add a layer of complexity. The Solana ETF application, for example, faced indirect denials and was not recognized by the SEC due to internal conflicts.

Seyffart said that while new leadership may expedite approvals, a more realistic timeline includes a review period of 240 to 260 days. He remains optimistic about the future regulatory environment for crypto products, anticipating less resistance in 2025.

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