Spot ETF Boom: A New Era for Bitcoin and Beyond
The launch of spot Bitcoin (CRYPTO: BTC) exchange-traded funds (ETFs) in January marked a significant milestone in cryptocurrency investment. These ETFs have been pivotal for Bitcoin, contributing to its remarkable triple-digit gains this year as tens of billions of dollars poured into these funds, significantly driving up the Bitcoin price.
As the cryptocurrency landscape evolves, Ethereum (CRYPTO: ETH) has also joined the ETF market as of July. Investors are now speculating which cryptocurrency could follow suit in 2025. Currently, I’m focusing on three key candidates: Solana (CRYPTO: SOL), XRP (CRYPTO: XRP), and Cardano (CRYPTO: ADA). Approval for any of these as a spot ETF could trigger substantial price increases.
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Assessing Solana’s Potential
Leading the charge is Solana, the fifth-largest cryptocurrency globally with a market cap of approximately $100 billion. As of December 18, the price of Solana has surged by about 90% this year, building on an astounding 900% increase in 2023.
Investors liken Solana to a potential successor to Ethereum, which explains its rising value over the last two years. Both are smart contract blockchain networks, but Solana outshines Ethereum with faster processing speeds and lower costs. This has garnered enthusiasm from prominent investors like Cathie Wood of Ark Invest.
Image source: Getty Images.
Globally, developments are favorable for Solana’s ETF prospects. Brazilian regulators recently approved spot Solana ETFs, with eight Solana exchange-traded products (ETPs) currently active in Europe. This surpasses all cryptocurrencies except Bitcoin and Ethereum.
Several major investment firms have filed spot Solana ETF applications with the U.S. Securities and Exchange Commission (SEC). The approval could potentially coincide with the onset of the new Trump administration in early 2025.
XRP: Riding the Wave of Change
In second place is XRP, which has seen explosive growth since the recent presidential election. On Election Day, XRP was priced at around $0.50 but nearly reached $3 before a pullback. Currently, it boasts a 145% increase for the year.
Similar to Solana, XRP has become a potential candidate for a U.S. spot ETF, with multiple applications already filed by investment firms. Additionally, XRP ETPs are available in Europe, highlighting its growing presence.
XRP’s price surge is tied not only to ETF speculation but also to the optimism surrounding the Trump administration’s crypto-friendly policies. Since December 2020, XRP has faced regulatory hurdles due to an ongoing SEC lawsuit against Ripple, the company behind XRP. However, there is growing confidence that this lawsuit will resolve favorably in 2025, potentially clearing the path for XRP ETF approvals.
Cardano: A Steady Climber
Finally, Cardano has recently gained momentum, surpassing the $1 mark and currently up 55% for the year. This performance parallels Ethereum’s growth but trails behind Bitcoin’s 105% rise, which has led to Cardano flying under the radar for some investors.
Like Ethereum, Cardano operates as a smart contract blockchain network and is viewed by some as a potential competitor to Ethereum. With a market cap of $36 billion, Cardano currently ranks ninth in the cryptocurrency market. Its nearly decade-long history and strong developer community suggest it may have long-term viability.
If a spot ETF is approved in 2025, analysts predict that Cardano could see its price triple to around $3, reaching its previous high of $3.10 set three years ago.
Which Crypto to Watch: Solana, XRP, or Cardano?
Among the three cryptocurrencies discussed, Solana appears to hold the greatest potential for dramatic growth in the coming year. Compared to XRP, it faces fewer regulatory risks, and its prospects seem more promising than Cardano’s. With ongoing international ETF approvals for Solana, it seems well-positioned for success in the U.S.
While Bitcoin remains a solid investment, numerous other cryptocurrencies deserve attention. The powerful narrative surrounding ETF investments offers opportunities, and identifying the next cryptocurrency to receive spot ETF approval could enhance investment strategies in the near future.
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Dominic Basulto holds positions in Bitcoin, Cardano, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Cardano, Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
