JPMorgan analysts have tempered expectations for cryptocurrency exchange-traded funds (ETFs) beyond Bitcoin and Ethereum, despite anticipated regulatory easing under a potential Trump administration. According to a recent investor note, altcoin ETFs like Solana and Ripple’s XRP are unlikely to attract significant capital compared to their larger counterparts.
While Ripple’s XRP ETFs could garner up to $8 billion and Solana ETFs $3 to $6 billion, these figures pale in comparison to Bitcoin ETFs, which amassed $107 billion in 2024. Ethereum ETFs also saw robust investor interest, pulling in $12 billion within six months.
Uncertainty Clouds Altcoin ETF Demand
Investor appetite remains a major challenge for altcoin ETFs. JPMorgan analysts expressed doubts about the broader appeal of such products, citing the subdued performance of existing trusts. Grayscale’s Solana trust holds just $99 million, while its XRP counterpart manages a mere $12 million.
Even BlackRock, a pioneer in Bitcoin ETFs, has opted out of launching a Solana ETF, citing demand concerns. Industry insiders share this sentiment. Sui Chung, CEO of CF Benchmarks, remarked, “Solana ETFs won’t replicate the success of Bitcoin and Ethereum products due to limited interest.”
Altcoin ETFs: Big Players Push Forward
Despite the lukewarm outlook, industry players are not backing down. Firms like Bitwise, VanEck, and 21Shares have already filed applications for Solana ETFs, hoping to tap into any potential surge in demand.
The episodic nature of the cryptocurrency market could play a role, with investor sentiment often shifting rapidly between different tokens. This volatility, according to JPMorgan, contributes to the limited long-term interest in altcoin-based ETFs.
Bitcoin and Ethereum’s Dominance Remains Unmatched
Bitcoin ETFs captured 6% of Bitcoin’s total market value in their first year, a record-breaking debut. Ethereum ETFs followed suit, accounting for 3% of the network’s market cap in just six months. This robust demand underscores the dominance of Bitcoin and Ethereum as the mainstays of the cryptocurrency ecosystem.
For altcoins like Solana and XRP, the path forward is less certain. Analysts predict that 2025 might mark a turning point for XRP if Ripple’s ongoing legal battle with the SEC concludes in its favour. However, without a similar breakthrough, the outlook for altcoin ETFs remains subdued.
The Road Ahead for Crypto ETFs
While Bitcoin and Ethereum continue to capture Wall Street’s attention, the crypto industry’s next wave of ETFs faces an uphill battle. As JPMorgan points out, the uncertain demand for altcoin ETFs could hinder their success. However, with industry giants pushing forward, the possibility of a breakthrough cannot be ruled out entirely.
The key question remains whether investor interest will expand beyond the primary tokens or if Bitcoin and Ethereum will retain their dominance. For now, the broader cryptocurrency ETF market appears poised for slow and incremental growth.
