- The SEC approved the Ethereum ETF on May 23, 2024.
- Analysts predict high demand for the Solana ETF.
- Cryptocurrencies such as Litecoin and Dogecoin are also potential candidates.
The U.S. Securities and Exchange Commission’s (SEC) recent approval of an Ethereum ETF was one of the most significant developments in the cryptocurrency industry in recent months. In the near future, Ethereum is likely to see increased liquidity as traditional finance jumps into the cryptocurrency trend.
Additionally, this decision opens the way for other tokens to do the same. The next best candidate for a cryptocurrency ETF is Solana, which stands to benefit the most from regulatory changes.
Regulatory changes from the SEC and their impact on Solana
On Thursday, May 23, the U.S. Securities and Exchange Commission (SEC) made the landmark decision to approve an Ethereum exchange-traded fund (ETF). This decision comes after the SEC previously approved a spot Bitcoin ETF, influenced by a court ruling against the agency.
Ahead of the Ethereum ETF ruling, the SEC came under significant pressure from legislators. A bipartisan group of U.S. lawmakers, including Rep. French Hill, vice chairman of the Financial Services Committee, and House Majority Whip Tom Emmer, urged the agency to apply the rules consistently.
They argued that if the SEC approved the Bitcoin ETF, it should also approve the Ethereum ETF. Importantly, this logic can be applied to other cryptocurrency ETFs as well. This is especially important for Solana, which claims to be the next token investors are most likely to get its own ETF.
Why Solana is Uniquely Positioned to Secure ETFs
ETF approval could significantly increase demand for Ethereum and other approved tokens. In less than six months since approval, the Bitcoin ETF has already attracted more than $12 billion in net inflows.
Source: Farside Investors
This is good news for Solana, which analysts predict will be the next token to have its own ETF. Bloomberg analyst James Seyffart predicted that demand for the Solana ETF would be so high that it would outperform other altcoin funds.
Moreover, a recent report from asset management firm Bernstein calls Bitcoin, Ethereum, and Solana the “big three” of cryptocurrencies, making Solana a natural candidate for the next cryptocurrency ETF.
But Solana faces significant obstacles. Unlike Ethereum, the SEC has already classified Solana as a security. Therefore, it is unclear whether the agency will apply the same principles to SOLs. Nonetheless, other altcoins have similar drawbacks, and the SEC’s Gary Gensler considers all cryptocurrency tokens except Bitcoin to be securities.
However, the recently approved Financial Innovation and Technology for the 21st Century Act (FIT21) aims to establish a comprehensive legal framework for cryptocurrencies. These legislative changes will have a significant impact on how institutions like the SEC treat cryptocurrency assets.
On the flipside
- Solana is not the only cryptocurrency vying for ETF approval. Litecoin, in particular, has a clearer regulatory path to approval due to its similarities to Bitcoin.
- Dogecoin is also a potential ETF candidate due to its decentralization and strong community.
Why This Matters
The potential approval of the Solana ETF could have a major impact on the cryptocurrency market. This will not only establish Solana as a leading blockchain platform, but will also attract significant institutional investment.
Learn more about ETH ETF approval:
BREAKING NEWS: SEC Approves All Spot Ether ETF from Total Pivot.
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