Nate Geraci, President of The ETF Store and a seasoned voice in the crypto market, recently shared his perspective on how the 2024 U.S. presidential election could influence the future of Solana (SOL) and XRP ETFs. His latest analysis specifically involves SOL, XRP, Litecoin (LTC) and other altcoins.
What are the Odds of Approval for Solana, Litecoin & XRP ETFs?
In his note, Geraci emphasized that “the impact of elections is typically overstated when it comes to investing.” However, he also acknowledged that political shifts could significantly shape the regulatory scene for crypto ETFs.
Geraci noted that while the identity of the president or the party controlling Congress may not drive major market movements, elections do “shape the regulatory environment surrounding investing.” This could indeed have crucial implications for the ETF industry.
The election outcome could have implications for the ETF industry…
3 key areas I’m watching:
1) Crypto ETFs
2) ETF Share Class Structure
3) ETF Taxation
My latest via @etfcom… https://t.co/h0gGa77KYG
— Nate Geraci (@NateGeraci) November 5, 2024
A key area of focus is leadership in the U.S. Securities and Exchange Commission (SEC), an agency Geraci described as playing “a critical role in the pace of ETF innovation.” The next SEC chairman’s stance on crypto will likely determine how quickly new products, including altcoin ETFs, could come to market.
A Look At Crypto ETF Scene
Crypto ETFs have already made significant strides, with the SEC’s approval of both spot Bitcoin and Ether ETFs. Now, several issuers are eyeing products for Solana, XRP and Litecoin. In a noteworthy development, Grayscale has proposed converting its Digital Large Cap Fund, which holds assets in Bitcoin (BTC), Ethereum (ETH), Solana, XRP, and Avalanche, into an ETF.
Updated chart w/ spot btc ETFs hitting $24bil net inflows…
Shows cumulative flows into physical gold ETFs vs spot btc ETFs.
Gold ETFs launched in 2004.
Bitcoin ETFs launched in 2024.
via @Todd_Sohn pic.twitter.com/TRBZlcoQiY
— Nate Geraci (@NateGeraci) November 5, 2024
According to Geraci, the regulatory environment’s openness to such developments may hinge on the election’s outcome. “The prevailing assumption,” Geraci noted, “is that a Kamala Harris administration would be unlikely to approve these products anytime soon,” pointing to the Biden administration’s combative approach toward crypto.
However, Geraci explained, a change in administration could shift the regulatory tone. Former President Donald Trump, who is running again, has stated he would take a more crypto-friendly approach, potentially allowing these new products to enter the market. But Geraci warned that “nobody knows for sure how this all might play out,” stressing that a “bipartisan, comprehensive crypto framework” remains the optimal long-term solution for the industry.
Aside from crypto ETFs, Geraci highlighted other pressing ETF-related issues that may be influenced by the election. Among these is the SEC’s consideration of allowing ETF share classes for existing mutual funds, an area with substantial backing from major players like BlackRock and Fidelity. A Republican-led SEC is expected to be more receptive to this structure, which could see massive inflows if approved.
Views on ETF Taxation
ETF taxation is another area to watch, according to Geraci, particularly as some legislators are considering proposals to tax ETFs differently. Given the ballooning U.S. national debt, he noted, “it is not unreasonable to think some crafty legislators might put the topic of ETF taxation back on the table.”
In sum, Geraci’s analysis underscores that while politics and investing may seem worlds apart, the intersection of ETFs and policy decisions has the potential to impact the crypto sector significantly. “The potential industry impact is real,” he concluded, and the next administration could influence how quickly innovative products like Solana and XRP ETFs come to market.
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