The race to become the next major cryptocurrency approved for a spot ETF in the United States is heating up—and XRP is emerging as a strong contender. According to analysts at Kaiko, a leading cryptocurrency research and data platform, XRP’s superior market liquidity and the recent launch of a leveraged ETF product position it ahead of rivals like Solana (SOL) in the regulatory approval pipeline.
With growing optimism around potential leadership changes at the U.S. Securities and Exchange Commission (SEC), momentum is building for new crypto-related exchange-traded funds. Analysts believe XRP could be next in line after Bitcoin and Ethereum to receive SEC approval for a spot ETF, thanks to two pivotal developments.
👉 Discover how market dynamics are shaping the next wave of crypto ETF approvals.
XRP Leads in ETF Applications and Market Depth
Kaiko’s latest report reveals that XRP currently leads all altcoins in the number of active spot ETF applications, with a total of 10 filings. This puts it well ahead of Solana, which has five pending applications, and Litecoin (LTC) and Dogecoin (DOGE), each with three.
But application volume isn’t the only metric where XRP excels. The cryptocurrency also dominates in market depth, a critical factor for ETF approval. On major centralized exchanges, XRP maintains an average market depth of 1%, the highest among altcoins. This means large buy and sell orders can be executed close to the current market price, minimizing slippage—the difference between expected and actual trade prices.
High liquidity is more than just a trading convenience; it's a regulatory prerequisite. Kaiko analysts emphasized this point in their report:
"A highly liquid spot market is essential for creating efficient structured products, and former SEC officials have historically been sensitive to this factor."
Solana matches XRP’s 1% market depth, placing it second among altcoins, followed by Cardano (ADA). However, XRP’s liquidity surged toward the end of 2024, driven by speculation that a pro-crypto administration could resolve the long-standing legal dispute between Ripple and the SEC—a key hurdle for any XRP spot ETF approval.
Teucrium Launches First-Ever XRP ETF—But It’s Leveraged
In a notable development, Teucrium launched XXRP, the first XRP-related ETF in the U.S. While not a spot ETF, XXRP is a 2x leveraged product that tracks daily returns of XRP using derivatives such as futures contracts and swaps.
This marks a significant milestone—even though the SEC has not yet approved a spot XRP ETF, investors now have regulated exposure to XRP through a listed fund. Bloomberg senior ETF analyst Eric Balchunas called the move unusual:
"It’s strange—possibly unprecedented—that the first ETF for this asset is leveraged. Spot XRP ETFs aren’t approved yet, though we think the odds are fairly high."
The existence of a leveraged ETF may actually work in favor of future spot approval. Regulators often view established financial products as evidence of market maturity and investor demand. By demonstrating institutional interest and infrastructure readiness, XXRP could indirectly support the case for a spot version.
👉 See how innovative financial products are accelerating crypto adoption.
Regulatory Outlook: A New SEC Chair on the Horizon?
Recent political developments have further fueled expectations. Paul Atkins, known for his pro-innovation stance on financial technology, was recently confirmed by the Senate to succeed Gary Gensler as SEC chair. His appointment signals a potential shift in regulatory tone—one that could be more receptive to crypto asset approvals.
Multiple asset managers, including Bitwise, Grayscale, and VanEck, have submitted or updated their crypto ETF applications in anticipation of this transition. The next key date to watch is May 22, 2025, when the SEC must respond to Grayscale’s XRP spot ETF application.
While approval isn’t guaranteed, the procedural progress indicates that regulators are actively reviewing the proposal—an encouraging sign for market participants.
Challenges and Competition in the ETF Race
Despite XRP’s advantages, hurdles remain. Presto analyst Min Jung cautions that demand for an XRP spot ETF is still uncertain:
"Even Ethereum ETFs saw muted adoption after launch. Many institutions still believe 'there’s Bitcoin—and then nothing else.'"
Moreover, Litecoin (LTC) presents a viable alternative. Some analysts argue that LTC’s proof-of-work consensus mechanism closely mirrors Bitcoin’s, making it easier to classify as a commodity rather than a security—a crucial distinction under U.S. securities law.
In fact, Bloomberg analysts predicted in January 2025 that LTC might be the most likely candidate for the next spot ETF approval due to its structural similarities with Bitcoin.
However, XRP’s combination of deep markets, active institutional engagement, and growing regulatory clarity gives it a compelling edge.
FAQ: Your Questions About XRP and the ETF Race—Answered
Q: Why is market liquidity important for a spot ETF?
A: High liquidity ensures stable pricing and reduces slippage during trades, which helps prevent manipulation and supports fair valuation—key concerns for regulators like the SEC.
Q: What’s the difference between a spot ETF and a leveraged ETF?
A: A spot ETF holds the actual asset (like physical XRP), while a leveraged ETF uses derivatives to amplify daily returns (e.g., 2x gains or losses). Leveraged ETFs are riskier and not suitable for long-term holding.
Q: Has the SEC approved any XRP ETF yet?
A: Not a spot ETF. However, Teucrium’s 2x leveraged XXRP fund has launched, offering indirect exposure via futures and swaps.
Q: Could Solana overtake XRP in the ETF race?
A: Solana has strong fundamentals and growing institutional interest, but it lags behind in both application volume and regulatory clarity compared to XRP.
Q: What happens if the SEC rejects Grayscale’s XRP ETF?
A: Rejection wouldn’t end the effort—applicants can appeal or resubmit with additional data. However, approval by May 22 would signal strong regulatory momentum.
Q: How might a new SEC chair impact crypto regulation?
A: A pro-innovation chair like Paul Atkins could accelerate reviews, encourage clearer guidelines, and increase the likelihood of approving non-Bitcoin crypto products.
👉 Stay ahead of regulatory shifts shaping the future of crypto investing.
Final Thoughts: XRP’s Path to Approval Looks Promising
While no outcome is certain, XRP’s dual advantages—exceptional market liquidity and early financial product innovation—are positioning it as a frontrunner in the post-Bitcoin, post-Ethereum ETF era. With ten active applications, top-tier market depth, and growing institutional backing, the ecosystem is maturing rapidly.
The launch of Teucrium’s leveraged ETF adds another layer of legitimacy, even if it doesn’t replace the need for a spot version. Combined with shifting regulatory winds and a clear catalyst date in May 2025, XRP appears better positioned than most to become the next major cryptocurrency with a U.S.-approved spot ETF.
As always, investors should conduct thorough research and consider both risks and opportunities before making decisions. But one thing is clear: the conversation around crypto ETFs is expanding beyond Bitcoin and Ethereum—and XRP is leading the charge.
Core Keywords: XRP, spot ETF, SEC approval, market liquidity, Teucrium XXRP, Solana ETF, Grayscale XRP application