SEC Delays Decisions on Multiple Crypto ETFs, Including XRP, Solana

The U.S. Securities and Exchange Commission (SEC) has extended the timeline for decisions on several spot exchange-traded funds (ETFs) for cryptocurrencies, including XRP, Solana, Dogecoin, Cardano, and Litecoin. This delay affects asset managers such as Grayscale Investments, VanEck, CoinShares, 21Shares, and Canary Capital, as indicated by recent filings on the SEC’s website. The regulator has also deferred decisions on filings from Nasdaq Stock Market for in-kind creations and redemptions for BlackRock’s iShares Bitcoin Trust (IBIT).

In addition to the altcoin ETF applications, the SEC has delayed decisions on in-kind creations and redemptions for the Fidelity Wise Origin Bitcoin ETF, Fidelity Ether, and 21Shares’s proposal to incorporate staking in its Ether ETF. While this postponement may disappoint investors, it is not entirely unexpected. The SEC’s review process for new financial products, especially those tied to new asset classes like cryptocurrencies, is often complex and involves multiple stages. The regulator frequently delays initial decisions to gather more information, address concerns, or seek public comment. This is a common practice, as seen in the history of delays on cryptocurrency-related investment products like spot Bitcoin and Ethereum ETFs.

The latest delays are considered standard procedure and are not expected to significantly change the overall odds of approval for these ETFs. The final deadlines for decisions are not until October. The confirmation of Paul Atkins, President Trump's pick as the new SEC Chair, is pending Senate approval. The final decision on these ETFs is likely to come after Atkins’s confirmation, though there is no set date for his Senate confirmation hearing. Past delays in Bitcoin and Ether ETFs did not prevent their eventual approval, and delays are expected due to government processes.

On the same day, Franklin Templeton submitted an S-1 filing to the SEC for the Franklin XRP ETF. This official statement followed the company's registration of an XRP trust entity in Delaware on February 28 this year. Asset managers have filed the most applications for XRP and Solana ETFs. However, major Bitcoin ETF players like BlackRock, VanEck, Invesco, and Valkyrie have not entered the XRP ETF market. Excluding VanEck, these firms have also stayed out of the Solana ETF race. BlackRock evaluates potential ETFs based on client demand and a clear investment thesis. However, compared to Bitcoin and Ether, the firm’s Head of Digital Assets Robert Mitchnick sees low demand for other cryptocurrencies.

Bloomberg ETF analysts believe it is only a matter of time before the crypto ETFs receive approval from the SEC. Currently, Litecoin (LTC) is viewed as a strong contender, with approval odds estimated around 90%. The high probability is largely due to Litecoin’s similarities to Bitcoin and Ethereum, coupled with its established presence in the cryptocurrency market. Most importantly, the CFTC previously called it a commodity. Dogecoin (DOGE), despite its origins as a memecoin, also gets relatively favorable odds, estimated at 75%. This is due to its major market presence and the strong community support it enjoys.

Apparently, a clear regulatory status is now a key advantage, one that XRP and Solana have not yet secured. These crypto assets remain classified as “securities” in the SEC’s ongoing litigation against Binance and Ripple Labs. Solana’s (SOL) approval odds range between 70% and 85%. The positive outlook is supported by Solana’s robust ecosystem and growing institutional interest, with prediction markets demonstrating strong confidence in its ETF approval prospects. XRP’s approval odds are somewhat more nuanced, falling within the 65% to 80% range. Despite these legal complexities, there is optimism regarding its potential approval, driven by increasing institutional interest and anticipated settlement between the two entities.