XRP, Solana and Litecoin Risk Losing $30B Market if Kamala Harris Defeats Trump

How Will US Elections Impact Crypto ETFs? 

In 2024, Bitcoin and Ethereum spot ETFs by the Gary Gensler-led US SEC regime marked a major turning point for global financial markets. As of November 2024, the crypto ETF asset class has attracted over $30 billion in first-year inflows, with Wall Street big wigs including Blackrock, Vanguard and Grayscale emerging front-runners.

However, the expansion of the Crypto ETFs towards other altcoins now hangs in the balance ahead of 2024 US elections.  At the time of writing on Nov 4 2024, US-based investment firms have filled spot ETF applications for 3 major altcoins, Litecoin (LTC), Solana (SOL) and Ripple (XRP).

This analysis explores the progress of these applications, as well as experts’ opinions on the chances of Crypto ETF expansion under the two leading candidates, Donald Trump and Kamala Harris.

BTC and ETH ETFs Hit $20 Billion Inflows Within a Year Outpacing Gold

On January 10, 2024, the US Securities and Exchange Commission officially approved 11 Bitcoin spot ETFs. The Gary Gensler led SEC also 5 approved Ethereum ETFs, on May 23, but official trading was only ratified in late-July, after after multiple delays.

The newly-approved crypto ETFs have been well-received within by US corporate investors, emerging the fastest growing asset class in the US regulated markets, outpacing Gold (XAU) derivatives launched back in 2004.

Emphasizing this stance, Nate Gareci, President of ETFStore, an ETF investment advisor published the chart below showing that Bitcoin ETF inflows crossed the $20 billion milestone on Oct 18, within 250 days trading, a feat that took 5-years for the counterpart Gold derivatives.

More so, after a relatively lackluster start, the six listed Ethereum (ETH) have also attracted another $7 billion, bringing the cumulative capital stock crypto ETFs in the US to $31 billion at the time of publication on Nov 3.

Despite the glaring increasing popularity and adoption of cryptocurrencies globally, the Biden-Harris regime appear reluctant to expand ETFs beyond the two largest assets. Crypto proponents contend that concerns around market manipulation and industry maturity have been dispelled by the success of adoption of BTC and ETH ETFs.

Crypto ETFs Under Kamala Harris

Kamala Harris Regime Unlikely to Approve XRP, SOL and LTC ETFs – Bloomberg Analysts 

The approval of BTC and ETH ETFs under the Biden/Harris regime was hard fought. Notably, after years of multiple rejections, the first Bitcoin ETF applicant Grayscale, won a hotly contested lawsuit against the US SEC in August 2023.

This compelled the regulator to re-assess and approve the BTC ETFs, three months later in January 2024, and ETH ETFs in May.

Since then, issuers have been made attempts at listing next big crypto ETF launch. At the time of writing on November 3, several applications are currently in process for a funds tracking Ripple’s XRP, Litecoin and Solana.

“It won’t happen if Harris wins, regardless of the issuer.”

On August 20, Eric Balchunas, senior ETF analyst at Bloomberg alerted his 321,000 followers to a flow chart showing that Solana ETF applications were never acknowledged by the SEC, forcing exchanges to withdraw their 19b-4s  fillings.

While issuers’ S-1 fillings remain active, the Bloomberg chief ETF correspondent emphasized that a Kamala Harris win could effective end hopes of any approvals.

“Near-zero chance in 2024 and if Harris wins there’s prob near-zero chance in 2025 too. Only hope IMO is if Trump wins”.

Bloomberg Analyst Eric Balchunas, responding to a follower who asked if more crypto ETFs could be approved in 2024. 

Kamala Harris recently announced plans to introduce a regulatory framework aimed at specific demographics, including Black men, whom her campaign highlighted as a group with high engagement in digital assets. However, her political stance on cryptocurrencies remain unclear.

However, seeing how current President Joe Biden’s regime took a combative stance against crypto over the last 4-years, and taking into account Harris’ powerful position in that administration, crypto market watchers fear the status quo would continue under her leadership.

Crypto ETFs Progress Report

Ripple (XRP) ETF: (Grayscale, Bitwise, 21Shares)

Several financial firms have recently filed for XRP-focused exchange-traded funds (ETFs) with the U.S. Securities and Exchange Commission (SEC). On October 2, 2024, Bitwise Asset Management submitted an initial registration statement for an XRP exchange-traded product (ETP), according to Reuters reports.

Subsequently, on October 30, 2024, Grayscale Investments filed to convert its Digital Large Cap Fund, which includes XRP, into an ETF. Most recently, on November 1, 2024, 21Shares filed an S-1 registration statement proposing the 21Shares Core XRP Trust, aiming to list on the Cboe BZX Exchange.

All three Ripple (XRP) ETF filings are currently under SEC review, with no approvals granted yet.

Litecoin ETF Progress Report: (Canary Capital)

After months of speculation Canary Capital has taken steps to introduce a Litecoin (LTC) ETF in the United States. On October 15, 2024, the firm filed an S-1 registration with the SEC for a spot Litecoin ETF.

This initiative aims to provide investors with direct exposure to Litecoin through a regulated investment vehicle. As of Nov 4, the Litecoin ETF filing is under SEC review, and no approval has been announced to date.

Solana ETF Progress Report: (VanEck, Canary Capital)

Interest in Solana (SOL)-based ETFs has been growing. On June 27, 2024, investment manager VanEck filed to list the first U.S. exchange-traded fund linked to the spot price of Solana. More recently, on October 30, 2024, Canary Capital filed for a spot Solana ETF with the SEC.

These filings are currently under SEC review, with no approvals granted yet.

Crypto ETFs Under Donald Trump

In contrast to Biden/Harris regime hardline stance against crypto over the last 4-years, Donald Trump delivered a rousing speech at the Bitcoin 2024 conference in July 2024, promising to make the US a “Crypto leader”.

Backed by Elon Musk’s support appearances at several Republican party campaigns, Trump’s crypto-friendly stance has resonated positively among crypto enthusiasts in recent months.

Further emphasizing his support for the industry, Trump launched his own official cryptocurrency, World Liberty Financial (WLFI)  on October 16, 2024.

While the WLFI project struggled to gain traction, may enthusiasts applauded the move as a major endorsement for friendlier regulatory regime, which could accelerate the approvals for the ongoing lite if he wins at the polls on Nov 5.

Conclusion: Crypto Traders Betting Big on Trump Win

A win for Kamala Harris in the Nov 5 election could see XRP, Litecoin and Solana miss out on the chance to pull capital inflows from major US-govt regulated corporate investors like Pension Funds, endowments, and insurance companies.

Notably the Biden/Harris regime has been heavily criticized for stiffing blockchain technology growth and innovation in the US, with long protracted lawsuits against major crypto firms including the likes of Coinbase, Binance and Ripple.

Nate Geraci, president of the ETF Store, also echoes this outlook.

“It seems highly unlikely that a Harris administration would approve additional spot crypto ETFs, at least not anytime soon after the election,”

Nate Geraci, President, ETF Store.

Without access to these trillion-dollar institutional capital pool XRP, Solana and  Solana now risk being sidelined from accessing the government-approved ETF market worth $30.1 billion as of Nov 3.

Against the backdrop of 4-years of legal onslaught from the Biden/Harris regime against major players within the crypto sector, markets experts have hinted that Litecoin (LTC), Solana (SOL), and Ripple (XRP) are unlikely to be approved except Republican party nominee, Donald Trump wins the November 5 Presidential elections.

Unsurprisingly, 48-hours to the elections, Donald Trump remains the overwhelming favorite candidate among crypto traders.

According to the latest data culled from Polymarkets, a predictions markets platform that allows users to wager on real-world events, Trump is currently in the lead with over 54.8% of votes against Harris in distant second with 45.2%.