- Trump's inclusion of altcoins may change ETF approval timeline.
- Sceptics aren't so sure given lack of clarity around strategic reserve.
- Investors are riding a wild market.
Altcoin ETFs just got a big boost from Donald Trump.
No, the president did not issue an edict that applications for such funds be approved.
Yet by including Cardano, XRP, and Solana in his proposed strategic reserve Trump did tacitly rubber stamp the cryptocurrencies.
After all, if the tokens are good enough to be supported by taxpayers in a reserve then they are certainly qualified to comprise exchange-traded funds.
Or, that’s how the thinking goes in the market at the moment.
“Including XRP in a strategic reserve strengthens the case for XRP ETF applications by helping to resolve some key regulatory concerns,” Jonathan de Wet, chief investment officer at crypto trading firm Zerocap, told DL News.
Not so fast, say sceptics.
Congress will weigh in
Just because Trump is touting a crypto reserve that would be anchored by Bitcoin and Ether doesn’t necessarily mean it will happen.
Luke Nolan, a research associate at crypto investment firm Coinshares, said Trump’s announcement did not contain a timeline for the fund’s creation.
“We are assuming a bill of some sort would have to pass through Congress, and in my view, it’s unlikely that the reserve will look exactly as proposed,” Nolan told DL News.
Zach Burks, CEO of NFT marketplace Mintable, told DL News that Trump’s social media post meant “nothing concrete.”
“He included these tokens, knowing that ADA and XRP are completely worthless for the US and will not be included in any form of strategic reserve,” Burks said.
“These are not nearly as comparable as the strategic reserve of gold that the US holds.”
Shot in the arm
In any event, the Securities and Exchange Commission is reviewing ETF applications for all three altcoins.
And given that Trump has not only vowed to champion crypto but has leaped into the business himself with a memecoin and other ventures, chances are the SEC will green-light the ETFs.
Still, Meryem Habibi, the chief revenue officer at Bitpace, a crypto payment gateway, said Trump’s call for a reserve should accelerate approval of ETFs for the likes of Solana and XRP.
And the market could use a shot in the arm this week.
After rallying on Sunday and Monday following Trump’s announcement, the crypto market has plunged on fears the president’s trade war against US allies will spur inflation and force the Federal Reserve to forestall decreasing interest rates, or worse, raise the benchmark to curb price hikes.
Solana has skidded 16% in the last 24 hours, while Cardano has tumbled 18% within the same period. Ripple’s XRP, meantime, is down almost 12%.
While the short-term market prospects look bleak, Nolan said a resurgent Bitcoin and SEC-approved altcoin ETFs could spur price gains for XRP, Solana, and Cardano.
“In an optimistic scenario, I think XRP and Solana would gather more institutional interest and are likely to attract higher flows,” Nolan said.
Crypto market movers
- Bitcoin is down 11%, to $82,916
- Ethereum is down 13%, $2,071
What we’re reading
- US economy worries torpedo Trump crypto surge as Bitcoin sinks to $86,000 ― DL News
- US Crypto Reserve = market mayhem! ― Milk Road
- Bitcoin Has Declined 20%. How Soon Could the BTC Price Revive? ― Unchained
- Why is $HYPE so strong right now? ― Milk Road
- Inside DeFi exchanges caught in North Korea’s $1.4bn laundering spree ― DL News
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? please contact him at osato@dlnews.com.