Will Kamala Harris Open the Door to More Crypto ETFs as President? Here’s What Analysts Think

Key Takeaways

• U.S. spot XRP, SOL, and LTC-based ETFs are pending approval.
• Analysts expressed skepticism about crypto ETF approvals under Kamala Harris’ administration.
• The future of crypto ETFs hinges on who leads the SEC.

The future of crypto exchange-traded funds (ETFs) hangs in the balance, particularly in light of the upcoming U.S. presidential election.

Issuers are eager to expand their offerings with new ETFs targeting assets like Ripple (XRP) and Solana (SOL).

However, experts suggest that the election outcome could heavily influence the prospects for these new funds.

ETFs Future Under Harris

The Game-Changer: A New SEC Chair

As the prospect of a Harris administration looms, analysts are debating the likelihood of new crypto ETFs gaining approval.

According to XS analysts, who echoed the sentiments of Balchunas and Geraci, a Harris-led SEC may not be conducive to crypto ETF growth, citing her cautious stance on digital assets.

“It’s challenging to see new crypto ETFs approved under a Harris administration,” they said but added that the appointment of a new SEC chair could be a game-changer.

“If—as rumored—Mark Cuban would become the regulator’s chairman if Harris wins the elections, there will still be an open door for new crypto ETFs. And, regarding this, we think XRP one would be the first to receive the green light,” XS analysts told CCN.

Harris’ Support for Innovation Is Key

Bepi Pezzulli, a market analyst and director at Italia Atlantica think tank, offered a more nuanced view, suggesting that Harris’ support for financial innovation could translate to continued progress for crypto ETFs.

“However, this is not a slam dunk and will ultimately hinge on how her administration navigates the complexities of digital asset regulation,” he cautioned.

Pezzulli added, “Reckless policy announcements, such as the proposed taxation of unrealized capital gains, could create an inconsistent policy environment for crypto ETFs.”

According to Pezzulli, on the macroeconomic front , Harris may leverage crypto instruments as part of a broader strategy to combat inflation, promoting alternative investment vehicles that appeal to younger, tech-savvy demographics.

“However, the Democratic inclination toward overregulation could pose challenges for the crypto ETF landscape, potentially stifling innovation and growth by imposing stringent and unnecessary compliance requirements,” the expert added.

“Ultimately, the balance between fostering innovation and ensuring favorable, as opposed to ideological, regulatory oversight will be crucial in determining whether more crypto ETFs emerge during her tenure.”

New Potential ETFs

In addition to Bitcoin and Ethereum, several new potential crypto ETFs are being considered for launch in the U.S.

Some notable ones include XRP, SOL, and Litecoin (LTC).

Canary Capital, a cryptocurrency investment firm founded by former Valkyrie CIO Steven McClurg, recently filed an application for Canary XRP ETF with the  U.S. Securities and Exchange Commission (SEC),  a spot ETF focused on XRP.

This application is the second for an XRP ETF in the U.S. after Bitwise.

Canary Capital also submitted a registration application with U.S. regulators for a spot Litecoin (LTC) ETF.