The crypto market is in a state of limbo due to the suspension of the decision-making process by the US Securities and Exchange Commission (SEC) for a number of cryptocurrency exchange-traded funds (ETFs) tied to the altcoins XRP, Solana (SOL), Litecoin (LTC), Cardano (ADA), and Dogecoin (DOGE).
The SEC postponed final decisions until May 2025, citing the need for additional time to analyze the proposed rule changes. This decision affected several key applications, including Grayscale's XRP ETF and Dogecoin ETF, Cboe BZX Exchange's spot Solana ETF, and Canary Capital's applications for Litecoin ETF and Cardano ETF. In particular, it is known that the review of the Canary Spot ADA ETF is scheduled for May 29, and the Grayscale Spot Dogecoin ETF is scheduled for May 21.
Bloomberg ETF analyst James Seyffarth characterized the delay as "standard procedure" for the SEC, indicating that the decision was not a surprise to the market.
At the same time, the delay is causing mixed reactions: on the one hand, it gives the regulator more time for a thorough analysis, while on the other hand, it postpones the potential inflow of institutional investment in these assets, leaving investors in limbo until the end of spring.
Context and changes in SEC policy
The SEC's decision comes amidst a marked shift in its approach to cryptocurrencies. After the dismissal of former Chairman Gary Gensler, known for his tough stance, the Commission rejected several enforcement actions against cryptocurrency companies. This step is interpreted as a sign of a possible warming in the regulator's attitude towards the crypto market.
This easing may be due to the very loyal policy of the Trump administration, which, judging by the context, supports the development of the cryptocurrency sector. These changes add to the optimism about the prospects for ETF approval, although the final outcome will depend on the specific assets and their regulatory status.
Prospects for individual altcoins
Analysts highlight Litecoin and Dogecoin as the assets with the highest chances of getting their ETFs approved. These cryptocurrencies have a clearer regulatory status, which reduces the likelihood of their classification as securities.
Litecoin, due to its long history and technical similarities to bitcoin, and Dogecoin, despite its initial perception as a "meme coin," are considered less problematic for the SEC. Grayscale's application for a Dogecoin ETF, for example, could get the green light as early as May 21, if no additional obstacles arise.
Instead, XRP and Solana face significant challenges. XRP remains at the center of litigation between Ripple Labs and the SEC, where a key issue is its possible classification as a security. Similarly, Solana has unresolved issues regarding centralization and regulatory status, which could complicate the approval of a spot ETF from the Cboe BZX Exchange.
Cardano, although less controversial, also requires additional analysis by the SEC, and the outcome for the Canary Spot ADA ETF will not be known until May 29.
Significance for the market
The postponement of decisions on ETFs until May 2025 makes the end of spring a potentially pivotal moment for the crypto market. Approval of at least one of these funds could open the door to a significant inflow of institutional capital into altcoins, increasing their legitimacy and attractiveness to large investors.
This is especially true for Litecoin and Dogecoin, which may be the first in line for success. At the same time, a failure or further delays, especially for XRP and Solana, could increase pressure on these assets, keeping uncertainty among their investors.
While the SEC is conducting its review, the crypto market is closely monitoring developments. May 2025 promises to be a key period that will determine whether altcoins like XRP, Solana, Litecoin, Cardano, and Dogecoin will be able to attract institutional interest through ETFs.
Market participants are currently preparing for various scenarios, taking into account both positive signals from the SEC's policy change and existing regulatory risks for certain assets.
