JPMorgan: SOL and XRP-based funds could outperform ETH ETFs in the first six months after the launch

What’s new? New cryptocurrency-based exchange-traded products (ETPs) awaiting approval from the US Securities and Exchange Commission (SEC) could attract significant investment, according to analysts at JPMorgan bank. Investors expect the first spot exchange-traded funds (ETFs) based on the Solana (SOL) blockchain token and fintech company Ripple’s XRP token to hit the market after Donald Trump’s inauguration on January 20 and the start of a new cryptocurrency-friendly administration.

Cointelegraph’s material

What else is known? In a January 13 report, JPMorgan experts predicted that SOL and XRP-based funds could outperform similar Ethereum-based products in terms of assets under management (AUM) in the first six months after approval.

Spot ETH ETFs were admitted to the market in July 2024 and have accumulated $10,87 billion in assets to date, representing 2,92% of the market capitalization of the second-largest cryptocurrency.

These results are much more modest when compared to spot bitcoin funds that appeared on leading US stock exchanges in early 2024. Such products collected $105,05 billion or 5,67% of the first cryptocurrency’s capitalization under management.

The peculiarity of US spot ETH ETFs is that the SEC has not allowed issuers to put coins purchased on behalf of investors into staking, which would bring additional yield.

Relying on adoption indices, JPMorgan estimated that SOL funds could raise between $3 billion and $6 billion, while XRP funds would see inflows of between $4 billion and $8 billion.

Thus, bitcoin ETFs have a 6% adoption rate, as they have attracted about 6% of the asset’s capitalization. Correspondingly, for ETH funds, the figure is close to 3%.

However, analysts note that the demand for altcoins among investors is less stable, which makes it difficult to predict the effectiveness of new funds.

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“Outside of a few primary tokens (BTC, ETH, SOL), the episodic nature of the crypto market is driven by varying investor sentiment and trendy new coins that may capture incremental attention for a limited time.“We don’t see tokens with such limited depth successfully hosting an ETP,” the report says.