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Bloomberg’s James Seyffart has shared insights on the challenges facing XRP and SOL ETFs, predicting potential approval by 2025. Regulatory hurdles like compliance and market manipulation remain, but changes in SEC leadership could reshape the landscape.
Regulatory Uncertainty Clouds Altcoin ETF Prospects
Because of prior decisions issued by the SEC, the present climate regarding cryptocurrency ETFs is still somewhat unclear, according to Bloomberg Analyst James Seyffart.
The primary reason why Bitcoin and Ethereum ETFs were approved was because of their link to the CME regulated futures markets. The lack of regulated futures markets for many altcoins, such as SOL and XRP, may cause the ETF selection process to be more drawn out than necessary.
“Without a regulated market of significant size, the SEC has historically denied altcoin ETF applications,” Seyffart explained. He did mention that the SEC's leadership could change these rules in 2025, but that the approval timeline is still up in the air.
Although companies such as WisdomTree and 21Shares have submitted applications to launch XRP ETFs, Seyffart pointed out that the regulations as they stand do not allow it. Market manipulation, custody, and regulatory concerns are just a few of the things that must be resolved before these products can move forward.
XRP ETF Filings Signal Positive Momentum
For alternative cryptocurrency exchange-traded funds (ETFs), the recent XRP ETF filings—including WisdomTree's "WisdomTree XRP Fund"—are a positive development. The firm is anticipated to submit the official S-1 registration with the US SEC shortly after registering this fund in Delaware.
According to Bloomberg analyst James Seyffart, staking for altcoins like Ethereum—and maybe others like SOL and XRP—may be a crucial part of future exchange-traded funds. But he did point out that staking within ETF structures is not allowed under the rules as they stand.
“If a more crypto-friendly US SEC administration takes charge, we may see staking allowed in 2025,” he stated, implying that legalizing staking could boost demand for such products.
Regulatory Filing Processes Delay Altcoin ETF Approvals
According to Bloomberg analyst James Seyffart, there are two main ways for exchange-traded funds (ETFs) can be filed: one is the 19b-4 rule filing with the SEC's Division of Trading Markets, which initiates a formal review phase with due dates, and the other is the S-1 prospectus, which does not have due dates.
The majority of altcoin ETFs still have not completed the 19b-4 process, he said, in contrast to Bitcoin and Ethereum. This indicates that the regulatory clock is not yet ticking on their approval.
According to Seyffart, “Even if altcoin ETF filings begin the 19b-4 process today, decisions could take until late 2025,”
Another factor that the analyst mentioned could impact the speed of approvals is the impending leadership changes at the SEC. The magnitude of changes is unclear, but a pro-crypto administration with a new US SEC chair would speed things forward.
James Seyffart, an analyst at Bloomberg, has also weighed in on the topic of potential multi-asset index ETFs, similar to those that invest in Bitcoin, Ethereum, and other cryptocurrencies like SOL and XRP. Products that have sought to become exchange-traded funds (ETFs) may be less impacted by regulatory concerns; for example, Bitwise's Crypto 10 Index and Grayscale's GDLC are highly exposed to Bitcoin and Ethereum.
Bitcoin and Ethereum Lead Multi-Asset ETF Allocation
According to Coingape, he elaborated on how keeping the bulk of the fund's allocation in Bitcoin and Ethereum could alleviate regulatory worries about altcoins in these index ETFs. The smaller cryptocurrency holdings' compliance with existing rules will likely determine whether these products are approved for sale by the SEC.
The incoming SEC administration will decide everything, according to Seyffart, who is hopeful but not overly sure about the approval of cryptocurrency ETFs.
Decisions on XRP, SOL, LTC, and HBAR ETFs might be made as early as 2025, according to him, but how often this happens will rely on leadership turnover and broader changes in regulation.
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