LINK ETF confirmed for 2025? XRP and SOL launches move up Chainlink timeline

When Chainlink (LINK) briefly appeared on a DTCC reference list, the crypto industry quickly proclaimed: "LINK ETF confirmed." However, this was a routine DTCC update to prepare for potential ETFs, not an approval from the SEC. LINK being in the settlement system is a step forward, but far from regulatory approval.

Historical context: Most crypto ETFs that have appeared on the DTCC list eventually went live within six months. For example:

• Bitcoin ETFs were added in October 2023 and launched in January 2024.
• Canary Capital’s XRP ETF appeared on DTCC in the same month and went live today.

Despite the optimism, the distinction remains crucial: DTCC handles operational readiness, not regulatory approval. Crypto assets like Bitcoin, Ethereum, and XRP have gone through similar rumor cycles before.

To launch a crypto ETF, two critical approvals are required in a specific sequence:

1. Rule 19b-4 Approval: The exchange seeking to list the ETF must obtain approval to modify its rules. This includes:

   • SEC evaluation of whether there’s a market "of significant size" to detect and deter misconduct.
   • Surveillance agreements or analysis, such as correlation between futures and spot prices (used in Ethereum ETF approvals).

2. S-1 Registration Statement: The ETF issuer must submit an S-1 form detailing the fund’s structure, pricing, risks, and fees. The SEC reviews and may request clarifications before declaring it effective.

Without both approvals, a listing on DTCC’s website acts as mere scaffolding. This has historically been a stumbling block for crypto ETFs, making the process highly scrutinized and lengthy.

If a LINK ETF progresses through approval and launches, it offers mainstream investors an easier way to gain exposure to digital assets. Instead of dealing with wallets, seed phrases, and tax complexities, investors could buy LINK via the same brokerage account that holds Apple stock or an S&P 500 fund.

However, this ease comes with notable trade-offs:

• Management Fees: ETF holders pay these fees, which could cut into returns.
• Tracking Differences: ETFs may not perfectly match the coin’s actual market value due to liquidity or trading volume gaps.
• Loss of Utility: ETF investors only hold exposure—they won’t use LINK for DeFi, staking, or governance.

For advisors, altcoin ETFs could represent a niche asset class with limited portfolio allocation due to their volatility.

Liquidity constraints could pose challenges for a LINK ETF if large creations or redemptions reduce DeFi or exchange liquidity. This could lead to more pronounced price swings, especially in stressed markets. Additionally, the question of staking presents further complexity:

• If an ETF stakes LINK, the SEC may require enhanced disclosures similar to other staking-based assets like BSOL.
• Staking risks would need to be clearly communicated to investors, making approval harder but not impossible.

DTCC’s role remains operational, focused on settlement and record-keeping. LINK being listed by DTCC simply indicates that systems are gearing up for potential ETF approvals.

It’s essential to distinguish genuine ETF developments from mere speculation. Here are the key indicators to watch for:

• 19b-4 Approval: This SEC approval allows an exchange to legally list the product. Such filings appear on the SEC website or the Federal Register.
• S-1 Going Effective: Once an issuer has an effective S-1 on the SEC’s EDGAR system, shares can be offered to the public.
• DTCC/NSCC Listings: These signify back-office readiness but do not imply regulatory approval.
• SEC Surveillance Statements: Mentions of correlation analysis or manipulation oversight (as with Ethereum ETFs) provide insight into the SEC's decision-making process.

Each new ETF application faces unique liquidity and integrity tests, but the blueprint established by Bitcoin, Ethereum, Solana, and XRP shows how altcoin exposure could be made mainstream.

The likelihood of a LINK ETF going live in 2025 was estimated at 30%, but the recent launch of XRPC from Canary Capital might expedite the timeline. Ultimately, formal SEC filings will signal the start of the ETF timeline—not rumors or screenshots.

For now, investors eager to participate should monitor regulatory progress closely. Approval of a LINK ETF could significantly transform how mainstream and institutional investors approach digital assets, making crypto investing far more accessible, albeit with inherent trade-offs.