XRP and Solana (SOL) are seen as top contenders for U.S. spot ETF approval, with XRP edging ahead due to its growing liquidity, according to a new report by Kaiko analysts.

Data from Kaiko Indices reveals that both XRP and SOL have some of the deepest 1% market depths on vetted exchanges. Since late 2024, XRP has surpassed SOL in liquidity, even outpacing Cardano’s (ADA) liquidity by a wide margin.

Unlike Bitcoin, which received spot ETF approval following a legal victory by Grayscale that highlighted the SEC’s inconsistent treatment of futures and spot markets, XRP operates differently. The token lacks a significant futures market and sees most of its trading volume offshore.

Nevertheless, XRP’s market share in the U.S. has risen to its highest point since the SEC’s 2021 lawsuit caused numerous delistings. In contrast, Solana’s share has declined from a high of 25-30% in 2022 to just 16% now.

XRP’s momentum has also been bolstered by the recent launch of Teucrium’s 2x XRP ETF, which tracks European exchange-traded products (ETPs) and swap agreements to provide double the daily returns of XRP. The product generated over $5 million in volume on its debut day, making it one of Teucrium’s most successful launches.

Kaiko analysts highlighted that these positive developments, combined with the launch of the 2x XRP ETF, position XRP ahead of other assets in the race for spot ETF approval. While other tokens like Litecoin (LTC) may also see potential for approval, XRP’s current market dynamics place it in a strong position.

However, despite XRP’s strong performance, the Deribit options market reflects some caution, with a bearish skew in implied volatility for April 18 expirations, indicating demand for protection against downside risk.

The SEC is currently reviewing multiple XRP spot ETF applications, with Grayscale’s filing facing a crucial deadline on May 22.