JP Morgan: Approval of alternative cryptocurrency ETF could attract $14 billion in investments, Solana and XRP become focal points.

Morgan Stanley analysts estimate that if approved by the U.S. Securities and Exchange Commission, a batch of exchange-traded funds (ETFs) holding alternative cryptocurrencies could attract as much as $14 billion in inflows. The analyst from the New York-based bank predicts that the proposed Solana ETF will attract $3-$6 billion in funds within 6 to 12 months, while the XRP fund will attract $4-$8 billion in funds during the same period. To arrive at this prediction, Morgan Stanley studied the adoption rates of existing spot cryptocurrency ETFs. Bitcoin funds hold approximately $108 billion in assets, about 6% of the token's market value. These funds entered the market exactly a year ago. Since the launch of Ethereum ETF six months ago, $12 billion has been raised, representing a 3% penetration rate of the token's market value. Although Morgan Stanley predicts that the world's largest digital asset Bitcoin will continue to be favored by investors, analysts suggest that Solana and XRP may also garner significant interest, despite uncertainties about their appeal. Kenneth Worthington, a Morgan Stanley analyst, writes in a report, "The key issue here remains the uncertainty of investor demand for additional products and whether the launch of new crypto ETPs is significant." It is worth mentioning that last year, the U.S. Securities and Exchange Commission received several fund applications tracking various types of cryptocurrencies, such as the third-largest digital token XRP, the sixth-largest global token Solana, and the much smaller Litecoin token. The large number of applications indicates that the entire industry is striving to make this asset class more accessible to the public. Cryptocurrency has now become a key theme in Donald Trump's victory in the November election. The President-elect was originally a skeptic of Bitcoin, but later became an advocate, promising to reverse the regulatory crackdown under President Joe Biden, thus energizing the digital asset industry. So far, his actions have been in line with the industry's interests, particularly appointing industry supporter Paul Atkins to replace cryptocurrency opponent Gary Gensler as chairman of the U.S. Securities and Exchange Commission, and establishing a new position specifically for overseeing artificial intelligence and cryptocurrency. Morgan Stanley acknowledges that progress on ETFs beyond Bitcoin and Ethereum may be slow due to government changes, especially considering regulatory uncertainty. However, the analyst "expects other ETP applications to be submitted in 2025 and potentially approved."