The race for more crypto ETFs is heating up as asset managers push for new investment products beyond Bitcoin and Ethereum.
The SEC reviews multiple applications, with firms like Grayscale filing for Cardano, Solana, and XRP ETFs. While institutional demand is growing, regulatory uncertainty remains a major hurdle.
Some assets, like Dogecoin and Litecoin, are considered stronger candidates for approval due to their potential classification as commodities.
Analysts believe Litecoin has the highest chance of getting the green light, while XRP and Solana face more obstacles. This article looks at where things stand and which altcoin ETF could be approved first.
Where Crypto ETFs Stand Right Now
Since Bitcoin and Ethereum ETFs were approved, the focus has shifted to other major cryptocurrencies.
Source: NYSE
Grayscale, one of the largest crypto asset managers, has filed for a Cardano ETF through NYSE Arca, marking its first standalone investment product for ADA.
The plan is for Coinbase Custody Trust Company to act as the custodian, while BNY Mellon would handle administration. This move follows Grayscale’s efforts to convert its Solana and XRP trusts into spot ETFs.
While the SEC acknowledged Grayscale’s Solana ETF filing on February 6, this does not mean approval is guaranteed. The agency has been hesitant to approve ETFs for assets it may classify as securities, which could be a problem for Solana and XRP.
XRP remains in legal limbo due to Ripple’s ongoing lawsuit with the SEC, making its ETF approval more complicated.
An unexpected entry in the discussion is Dogecoin. Analysts James Seyffart and Eric Balchunas believe Dogecoin could have a stronger chance of approval than Solana and XRP.
They argue that the SEC might classify Dogecoin as a commodity, similar to Bitcoin, because of its proof-of-work system. Institutional interest in Dogecoin is also growing, with Grayscale launching a Dogecoin trust, signalling demand for such an investment product.
As more applications are filed, analysts say the SEC’s approach to crypto ETFs will depend on how assets are classified.
The leadership change at the SEC has raised hopes that approvals may become more likely, but unresolved legal questions remain a barrier. Until the regulatory framework is clearer, it is uncertain which ETF applications will succeed.
Which Altcoin ETF Could Be Approved First
Among all the altcoin ETFs currently being considered, Litecoin is seen as the most likely to be approved. Analysts Seyffart and Balchunas estimate a 90% probability that the SEC will approve a Litecoin ETF in 2025. The key factor behind this prediction is Litecoin’s similarity to Bitcoin.
Since Litecoin is a Bitcoin fork and operates on the same proof-of-work system, it is more likely to be classified as a commodity.
The SEC has already acknowledged regulatory filings for a Litecoin ETF, which puts it ahead of other altcoins in the approval process.
This contrasts with Solana and XRP, both of which are still entangled in regulatory uncertainty. The SEC’s lawsuit against Ripple remains unresolved, making it difficult for an XRP ETF to move forward.
Solana, meanwhile, faces ongoing questions about its classification, which could impact its chances of approval.
The SEC’s Crypto Task Force, led by Commissioner Hester Peirce, is expected to play a role in determining whether these assets are considered commodities or securities.
While Litecoin has the highest chance of approval, Dogecoin is not far behind. The same analysts estimate a 75% probability for a Dogecoin ETF, making it a stronger contender than Solana and XRP.
They give Solana a 70% chance and XRP only 65%. This ranking suggests that the SEC may be more inclined to approve assets classified as commodities rather than those involved in legal disputes.
The timeline for a decision remains uncertain, but the SEC is expected to finalize its stance on Litecoin, Solana, XRP, and Dogecoin ETFs between early and mid-October this year.
If Litecoin is approved first, it could create momentum for other altcoin ETFs to follow. Analysts believe that once a non-Bitcoin, non-Ethereum ETF gets the green light, it will set a precedent and open the door for more crypto ETFs.
This would increase market competition and give institutional investors more options for crypto exposure.
Conclusion
The push for more crypto ETFs continues, but approval remains uncertain. Grayscale and other firms are lobbying for Solana, XRP, and Cardano ETFs, but regulatory challenges could slow their progress.
Analysts see Litecoin as the strongest candidate for approval, followed by Dogecoin, as both are likely to be classified as commodities.
The next few months will be key as the SEC reviews pending applications. If Litecoin is approved, it could pave the way for more altcoin ETFs, bringing increased institutional investment into the crypto market.
Investors are closely watching how regulators will move forward, as their decisions could shape the future of crypto ETFs.