Dogecoin ETF More Likely Than Solana or XRP: Bloomberg Analysts

We’re more likely to see a Dogecoin exchange-traded fund (ETF) than we are a Solana or XRP ETF.

However, a Litecoin ETF is the most likely, according to Bloomberg ETF analysts Eric Balchunas and James Seyffart, who put the odds of a Dogecoin ETF being approved by the Securities and Exchange Commission (SEC) at 75%.

That puts the popular memecoin above Solana’s SOL and Ripple’s XRP, which have much more utility.

The analysts give Solana a 70% chance of approval and XRP 65%.

All three are well behind Litecoin, which Balchunas and Seyffart predict has a 90% chance, noting that it was likely to have been approved even under the SEC’s past leadership. That’s because Litecoin is a fork of the Bitcoin blockchain that is similar enough that it was considered likely to be approved for an ETF.

New Regime

Under former SEC Chairman Gary Gensler, the SEC was far more hostile to crypto than under President Donald Trump’s Acting Chairman, Mark Uyeda, and Paul Atkins, his choice as the permanent Chairman of the SEC once he can be confirmed by the Senate.

Under Gensler, the SEC approved only Bitcoin and Ether ETFs, saying those were the only two cryptocurrencies that were not securities. Further, the SEC had specifically called both Solana and XRP unregistered securities in lawsuits.

Uyeda has set up a task force to completely revise the SEC’s approach to crypto and just asked a court to pause its prosecution of top crypto exchange Binance for selling unregistered securities while the two parties try to negotiate a resolution.

Balchunas pointed out that change of administration, noting that except for Litecoin, the chances of any of the other three tokens being approved for an ETF was less than 5% under Gensler.

“So these are really good odds, relatively speaking,” he said, adding that they “will likely grow the more we see these go through the typical process.”

Another point Seyffart made, after receiving more than a few complaints from the XRP army, was that the odds of an XRP ETF being approved are predicated on Ripple concluding its legal battle with the SEC.

In-kind Redemptions

Existing Bitcoin and Ether ETFs all require the redemption of ETF funds to be in dollars, which is what almost all of the current roughly 60 applications plan on doing.

But on Feb. 5, the Cboe BZX Exchange amended its application for two proposed funds, the ARK 21Shares Bitcoin ETF and the 21Shares Core Ethereum ETF. It now wants investors to be able to receive their payouts in cryptocurrency rather than dollars.

This in-kind redemption would change the nature of ETFs to an extent, as they are currently a way to gain exposure to cryptocurrencies without dealing with the hassle and risks of managing the custody of those tokens.