JP Morgan Projects $15 Billion Inflows for Solana and XRP-Based ETPs

JP Morgan has forecasted that exchange-traded products (ETPs) based on Solana (SOL) and XRP could attract up to $15 billion in net inflows. Currently, these assets manage over $2.5 billion in assets under management (AUM) and recorded inflows exceeding $500 million last year.

According to CryptoSlate on January 14, JP Morgan's projection is based on the market share and asset flow patterns of Bitcoin (BTC) and Ethereum (ETH) ETPs. The estimate also takes cues from the early growth trajectory of existing crypto-based ETPs.

Bitcoin ETPs attracted $108 billion in their first year, representing approximately 6% of Bitcoin’s $1.8 trillion market capitalization at the time. Ethereum ETPs, in contrast, garnered $12 billion, roughly 3% of Ethereum’s $395 billion market value, within six months of launch. By comparison, Solana and XRP ETPs could see potential inflows of $3–6 billion and $4–8 billion, respectively.

Currently, Solana-based ETPs manage approximately $1.6 billion in AUM, while XRP-based products hold $910 million. In 2024 alone, the two products recorded net inflows of $438 million and $69 million, respectively. Experts predict that if these trends persist, the products could see significant inflows in the coming years.

Regulatory Challenges in the U.S.

Despite promising growth, regulatory uncertainty continues to cloud the approval of Solana and XRP-based exchange-traded funds (ETFs) in the U.S. Bloomberg ETF analysts James Seyffart and Eric Balchunas noted that the incoming Donald Trump administration might take a favorable stance on ETF approvals. However, Litecoin (LTC) and Hedera (HBAR) ETFs are seen as more likely candidates for approval ahead of Solana and XRP.

Litecoin’s status as a Bitcoin derivative increases its chances of being classified as a commodity, while Hedera has not faced intense regulatory scrutiny, reducing the likelihood of it being deemed a security.

In contrast, Solana and XRP face unique challenges. The U.S. Securities and Exchange Commission (SEC) recently declined to approve a Solana-based ETF. Additionally, Ripple Labs, the company behind XRP, remains embroiled in a legal battle with the SEC over whether XRP should be classified as a security.

According to Bloomberg, while there is optimism for new ETF approvals in 2024, ETFs based on Solana and XRP may require more time to gain regulatory acceptance.

This forecast underscores the growing interest in alternative crypto assets and the evolving landscape of cryptocurrency-based investment products. However, regulatory clarity remains critical for unlocking the full potential of these ETPs.