JPMorgan sees up to $8 billion in XRP ETFs – but warns of broader demand decline – DL News
- The company believes that there is limited appetite for new cryptocurrency exchange-traded funds.
- JPMorgan expects up to $8 billion to flow into the XRP ETF, and $6 billion into Solana.
- Short-term interest from cryptocurrency investors will also hamper demand, analysts said.
New cryptocurrency ETFs are coming, but there’s one problem: few want them.
Analysts at JPMorgan see limited appetite for new cryptocurrency exchange-traded funds other than Bitcoin and Ethereum – despite expectations that Trump will lift regulatory hurdles.
“We do not see interest or demand significant enough from investors to make the future launch of these exchange-traded altcoins beneficial to the cryptocurrency ecosystem,” JPMorgan analysts wrote in a note to investors on January 13.
The bank expects between $3 billion and $6 billion to flow into Solana ETFs, while Ripple’s XRP could attract up to $8 billion. Other analysts believe that 2025 may be the year in which the legal skirmishes between Ripple and the Securities and Exchange Commission end. Sending XRP soaring.
But these numbers are only a small portion of the capital that has flowed into Bitcoin and Ethereum ETFs.
Bitcoin ETFs raised $107 billion in 2024, while investors invested $12 billion in Ethereum in the past six months.
JPMorgan’s tepid outlook hampers the outlook for 2025 – especially with many supporters counting on a friendly Trump administration to help expand cryptocurrency adoption in the US.
The bank’s less optimistic forecast also challenges the assumption that Bitcoin’s favorability with Wall Street will translate to other cryptocurrencies.
Join the community to get our latest stories and updates
Uncertain demand
Will there be enough interest? JP Morgan isn’t sure.
“The key question here remains uncertainty about investor demand for additional products,” the analysts wrote.
BlackRock has already declined to pursue the Solana ETF due to demand concerns. Other critics echoed this sentiment.
“Solana ETFs will not be created — or at least, they will not happen on the same basis as Bitcoin and Ether did,” said Sui Chung, CEO of Kraken-owned index provider CF Benchmarks. It was said before DL News.
Bitcoin ETFs accounted for 6% of the total market capitalization of Bitcoin in their first year – representing Best debut in ETF history. Ethereum ETFs topped 3% of that network’s value in six months.
Meanwhile, market demand for Solana and XRP products remains low. Grayscale’s Solana Trust has just $99 million in assets, and its XRP fund has just $12 million under management.
He said that, The big players are still competing For Solana ETF. Bitwise, the fifth-largest Bitcoin ETF provider, has applied for one, along with VanEck and 21shares.
Episodic nature
JPMorgan blames the short-term attention span of cryptocurrency investors.
“With the exception of a few initial tokens, the episodic nature of the cryptocurrency market is driven by varying investor sentiment and trendy new coins that may attract increased interest for a limited time,” the analysts wrote.
However, there are more products to come whether investors want them or not.
Eric Balchunas, ETF expert at Bloomberg, He said Late 2024: “We expect a wave of crypto ETFs next year, but not all at once.”
Pedro Solemano is the markets correspondent for DL News. Got a tip? Send him an email at psolimano@dlnews.com.
https://www.dlnews.com/resizer/v2/NEDMOVMEBFHZ7NXM5PZQ44KHEY.jpg?smart=true&auth=bcaee88f20760d9bc000f0004d5dcc6f77d52f92c808bd229e317a89c5e627f8&width=1200&height=630
2025-01-14 19:01:00