"Solana, XRP Race for ETF Approval: Who Will Win Institutional Backing?"

The race for approval of ETFs from Solana and XRP is intensifying as both cryptocurrencies navigate regulatory hurdles and vie for institutional backing. Recent events have positioned XRP and Solana at the forefront of the cryptocurrency landscape, highlighting their potential to gain institutional acceptance amid evolving regulatory frameworks.

Notably, Eric Balchunas, Bloomberg’s senior ETF analyst, remarked that Solana’s recent SEC acknowledgment could set a precedent for other cryptocurrencies seeking similar liquidity. As Solana and XRP push for ETF approvals amid regulatory changes, both cryptos are vying for institutional investment—who will emerge victorious?

Solana’s path to ETF approval

Several factors have positioned Solana as a strong contender for ETF approval. The SEC’s Feb. 6 acknowledgment of Grayscale’s application to convert its Solana Trust into an ETF has set an October deadline for a decision. Beyond regulatory momentum, Solana’s strong network activity over the past year further strengthens its case. The blockchain has proven itself as a reliable network for transactions and smart contracts, most notably becoming the go-to chain for the recent memecoin trading frenzy, which saw billions in trading volume.

However, Solana remains entangled in securities-related legal challenges. In January, James Seyffart, an analyst at Bloomberg Intelligence, predicted that an SEC approval for a Solana ETF may not come until 2026 due to ongoing lawsuits against major exchanges. The SEC’s Enforcement Division claims SOL is a security, which has prevented other divisions of the agency from considering it as an underlying asset for a commodities ETF.

Why XRP could win the ETF race

Gensler’s tenure as SEC chair was marked by regulatory overreach against crypto firms, but it also set key precedents in landmark cases, including Ripple Labs’ partial victory against the SEC. During his time as chair, Gensler’s SEC aggressively pursued enforcement actions against crypto firms, targeting major exchanges like Coinbase and Binance, and classified numerous digital assets as unregistered securities.

One of the most significant legal setbacks for the SEC came in July 2023, when US District Judge Analisa Torres ruled that XRP itself is not inherently a security, and that only its institutional sales constituted securities transactions under the