57% of Institutional Cryptocurrency Investors Are Bullish About This Set of Catalysts for XRP and Solana

In January, Coinbase Global surveyed 352 institutional investors working in asset management companies, hedge funds, private banks, and family offices. An overwhelming majority of them controlled assets in excess of $1 billion, making them among the larger players in the markets. And per the results of that survey, there's a group of catalysts that most of those investors are excited about. XRP (CRYPTO: XRP) and Solana (CRYPTO: SOL) stand to gain quite a bit, assuming things continue as anticipated.

Here's why.

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These long-standing obstacles are finally being dismantled

Of those institutional investors in the Coinbase survey, 57% said that greater regulatory clarity would be the next catalyst for growth within the digital assets industry, which includes the entire cryptocurrency sector. By regulatory clarity, they likely mean new regulations that define the terms of competition in the cryptocurrency industry -- rather than a more piecemeal approach that merely seeks to prevent criminality using frameworks applied to other markets, like the stock market.

Both XRP and Solana are highly exposed to regulatory catalysts, and the early signs suggest that things are playing out in their favor. The Securities and Exchange Commission (SEC) dropped its lawsuit against Ripple, the company that issues XRP, on March 19, which caused the coin's price to rise substantially. The SEC had originally claimed that the business had issued XRP without filing the requisite paperwork for selling a registered security. Dropping the case appears to confirm Ripple's argument that XRP is not a security, but there's probably still a bit more elaboration to come from regulators on the exact principles that matter on this front.

Aside from that issue, a number of securities firms have already separately requested permission from the SEC to issue exchange-traded funds (ETFs) holding the coins. If those ETFs are approved, and under the present administration in the U.S. it is very probable that they will, it would mark a significant shift that makes the two chains more accessible to capital in the traditional financial system, which is very bullish. Other financial instruments, like ETFs holding financial derivatives of Solana or XRP, are also under consideration or already hitting the market.

Furthermore, as the SEC continues to provide the rules for competition within crypto as part of its new task force, launched in early March, the other legal ambiguities that might dissuade institutional investors today will continue to clear up. Then, their capital will flow in with higher volume. When it does, prices probably will rise accordingly. And considering that many institutional investors have very long time horizons for their investments, those higher prices could easily stick around for the foreseeable future and beyond.

Be aware that there's an international dimension here too

The recent progress and expected clarity from regulators in the U.S. are not the entire story here.

Regulatory bodies in other countries, including in countries with a lot of capital like China, are in the process of reworking their cryptocurrency rules. Many of those other groups of regulators will be slower to act than those in the U.S., which suggests that Solana and XRP could be exposed to more catalysts over the next few years as countries around the world make their preferred policies into explicit guidelines. And there are institutional investors waiting in the wings in those countries, too.

That means it's broadly a favorable time to buy XRP, Solana, and perhaps other altcoins that are in wide distribution globally. But investors should be aware that there might not ever be catalysts that are as powerful as these potentially upcoming ones, especially from the perspective of attracting capital from institutional investors. Think about it: When an asset is officially sanctioned or allowed to trade under the law, there's no possibility of a future comparable event.

This is to say that if you're going to invest in Solana or XRP, don't procrastinate for a year if you want to capture some upside from regulators clarifying the rules of the industry. Eventually, the main pillars of the new regulations will be in place, and at that point they will for the most part only have their (formidable) core growth drivers to rely on to reward holders.

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Alex Carchidi has positions in Solana. The Motley Fool has positions in and recommends Coinbase Global, Solana, and XRP. The Motley Fool has a disclosure policy.