The launch of exchange-traded funds (ETFs) for ether (ETH), the digital currency of the Ethereum network, is on track in the United States. While some experts suggest that they will be ready next week, the head of the Securities and Exchange Commission (SEC), Gary Gensler, believes that We will have to wait until September. Despite a possible delay, market interest is not waning and now the focus is on knowing What will be the next cryptocurrency to have a financial instrument of these characteristics?. In this context, BitcoinDynamic conducted a survey through Telegram and X to find out the opinion of readers regarding this topic. The question to open the game was: Which cryptocurrency would be the next to have an ETF? While the available options that the audience had were four: Tron (TRX), XRP, Cardano (ADA) and Avalanche (AVAX). Solana was not included in this survey because the companies VanEck and 21Shares They have already submitted applications to create an ETF of this asset before the SEC. Regarding the results of the survey, 33% of readers indicated that the Tron network's cryptocurrency will be the next to have its ETF. While another 33% voted for XRP, the token issued by the Ripple Labs company.. Meanwhile, 28% opted for ADA, the native cryptocurrency of the Cardano network, and the remaining 6% chose AVAX, the token of the Avalanche ecosystem.
BitcoinDynamic survey results. Source: BitcoinDynamic Design. Considering the opinions of the audience, the question arises as to which of these digital assets can have their ETF in the short term.
Regulatory issues
In order to launch a financial instrument based on a digital asset in the United States, it is necessary to highlight regulatory issues. As BitcoinDynamic has already reported, the SEC sued the Binance and Coinbase exchanges for alleged violations of federal securities laws. In the filings, the agency indicated that 12 cryptocurrencies, including SOL and ADA, are unregistered securities, so their commercialization can be prohibited. include sanctions that can affect both exchanges as well as its usersThe SEC also sued Ripple Labs on the grounds that it traded XRP to fund its activities. For the agency headed by Gensler, this asset is a security, while for the firm it is a “virtual currency.” Ultimately, this accusation was dismissed in 2023 by the US Justice Department.
Gary Gensler is the Chairman of the SEC. Source: YouTube/SEC. These court filings certainly have They are a major impediment for the assets that were voted in the survey to launch their ETF on the market..
Market issues
Mathew Sigel, head of Digital Asset Research at VanEck, explained the issues that must be taken into account for an issuing company to decide to launch an exchange-traded fund based on a digital asset. “You have to be convinced that the asset is a good investment and take into account who its creators are, which exchanges it is present on and the custodian of funds that support this asset,” he said in an interview with the Thinking Crypto site. He added that the firm found these characteristics in Solana and not in the XRP token. In this regard, Sigel commented:
“When we think about XRP, we notice that there is a lack of conviction and customer demand. So I would say that an ETF for that asset is less likely.” Mathew Sigel, Head of Digital Asset Research at VanEck.
This analysis goes in a direction opposite to the thinking of Ripple Labs CEO Brad Garlinghouse, who believes that it is only a matter of time before XRP, SOL and ADA have their own ETF. Meanwhile, Geoffrey Kendrick, head of digital asset and forex research at Standard Chartered Bank, believes that SOL and XRP They will launch an exchange-traded fund, but not until 2025. Considering the business arguments Sigel laid out, ADA, Tron and XRP are unlikely to go down anytime soon. In the case of the cryptocurrency issued by Ripple, it must be considered that entered a period of decline since the lawsuit filed by the SEC in 2020 from which it has not yet been able to recover. In fact, analyst Mike Fay noted that development activity and the user base on the Ripple network have decreased. In addition, several traders used the social network Reddit to indicate that XRP's poor performance is not linked to the SEC lawsuit. “I don't think it would have gone up much higher. It just doesn't stand out in any facet and I maintain that its time in the top 10 [de capitalización] “It is coming to an end,” considered one investor. It is worth noting that XRP has an exchange-traded product (ETP) that operates under the ticker AXRP on the Swiss Stock Exchange. For its part, the Cardano network implemented an IBC (Inter-blockchain Communication) protocol this year, improving connectivity with Ethereum and Cosmos. This development facilitates information between different digital asset ecosystems. However, despite these developments, the market is not showing great interest in ADA. In fact, its price is at a 86% below the all-time high (ATH) reached in September 2021.
Perhaps the argument in favor is that the firm 21Shares already has ETP based on ADA that operates on the Swiss Stock Exchange and on the Frankfurt Stock Exchange, Germany. As for TRX, it happens that the main use that this cryptocurrency has It is the payment of commissions of the stablecoin USDTissued by the Tether company. Which may be an indication that there are not many holders of this asset. It is worth noting that VanEck has a TRX exchange-traded note (ETN) fund that operates under the ticker VTRX in Liechtenstein.