Ripple CEO Brad Garlinghouse recently expressed his belief that XRP, Solana (SOL), and Cardano (ADA) could be the next cryptocurrencies to see exchange-traded funds (ETFs) on the market.

Speaking at Consensus 2024, Garlinghouse shared his optimistic outlook following the US Securities and Exchange Commission’s (SEC) approval of spot Bitcoin (BTC) ETFs and progress on Ethereum (ETH) ETFs.

Will XRP, Solana, and Cardano Be the Next ETFs?

Garlinghouse’s confidence stems from the SEC’s approval of Bitcoin and Ethereum ETFs, which set a precedent that could pave the way for more diverse crypto ETFs. He sees this move as increasing the acceptance and recognition of cryptocurrencies within the financial sector.

“I think it’s just a matter of time, and it’s inevitable there’s gonna be an XRP ETF, there’s gonna be a Solana ETF, there’s gonna be a Cardano ETF, and that’s great,” Garlinghouse stated.

His perspective aligns with his previous statements. In February, Garlinghouse asserted that the approval of Bitcoin ETFs marked the beginning of a broader acceptance of crypto ETFs. He believes such financial products could help diversify investment portfolios and reduce risk exposure.

Other industry experts share Garlinghouse’s enthusiasm, though opinions vary on which cryptocurrencies might follow. Brian Kelly, CEO of digital currency investment firm BKCM, recently suggested that approving spot Ethereum ETFs could provide clearer regulatory frameworks, potentially leading to more crypto ETFs, including Solana.

However, the path to an XRP ETF has its own challenges. Ripple’s ongoing legal battle with the SEC has cast doubt on its immediate viability. Joe McCann, CEO of crypto investment firm Asymmetric, highlighted these concerns.

“I’m a big Solana bull. […] I think Solana will be next [for ETFs]. Granted, there is some language in the Coinbase lawsuit that could impact that, but it seems unlikely. If you look at XRP, there is some history with the SEC. So, I don’t know if it is going to be the ETF that comes next,” McCann commented.

Read more: Crypto ETN vs. Crypto ETF: What Is the Difference?

McCann also pointed to significant interest from Solana’s traditional finance (TradFi) sector, driven by its perceived potential and favorable price action. He mentioned that TradFi entities view Solana as a promising investment, particularly after missing out on Ethereum’s previous growth cycles. This sentiment reinforces his belief that Solana is a strong candidate for the next ETF.

Regulatory Hurdles and Skepticism Surround Future Crypto ETFs

Despite these positive signals, some remain cautious. Nikolaos Panigirtzoglou, Managing Director and Global Market Strategist at JPMorgan, expressed skepticism about the SEC approving crypto ETFs beyond Bitcoin and Ethereum.

“We doubt. The decision by the SEC to approve ETH ETFs is already stretched given the ambiguity about whether Ethereum should be classified as a security or not. We don’t think the SEC would go even further by approving Solana or other token ETFs given the SEC has stronger (relative to Ethereum) opinion that tokens outside Bitcoin and Ethereum should be classified as securities,” Panigirtzoglou stated.

Panigirtzoglou added that legislative changes might be necessary for broader ETF approvals. If US policymakers pass laws clarifying that most cryptocurrencies are not securities, the SEC might be more inclined to approve other crypto ETFs. However, such regulations still need to be put in place.

The recent approval of spot Ethereum ETFs has reinvigorated the crypto market, though the process is still unfolding. Potential issuers await the SEC’s final approval before these products can begin trading.

Ethereum ETFs are particularly interesting because Ethereum uses a Proof-of-Stake (PoS) mechanism, which allows validators to earn staking rewards. Initially, companies applying to issue these ETFs included staking features in their applications.

However, the SEC requested these companies to revise their 19-4b and S-1 documents to exclude staking features. After preliminary approval, firms like VanEck and BlackRock have already updated their S-1 filings.

Read more: Ethereum ETF Explained: What It Is and How It Works

As the regulatory environment continues to evolve, the potential for new crypto ETFs remains a topic of keen interest and speculation within the industry.