- The Solana ETF is one of those ETFs that continues to be a hot topic in the industry.
- Industry analysts debate the likelihood of approval.
- Tensions are rising over how political developments will affect the proposals.
The year-long exchange-traded fund (ETF) frenzy has seen the approval and proposal of Bitcoin and Ethereum ETFs, respectively, most recently with Solana following the initial submission by VanEck in June 2024. Since then, discussions have taken place across the industry regarding the likelihood of approval, characterized by both optimism and hesitation about the fate of the proposed investment vehicles.
New filings related to the proposal have given analysts additional insight into whether a launch is likely.
Solana ETF: Potential or Not?
On Monday, July 8, 2024, after Cboe Securities filed Form 19b-4s with the Securities and Exchange Commission (SEC) for the VanEck and 21Shares Solana ETFs, ETF Store founder Nate Jerassi emphasized that the approval of these filings will begin the countdown to a ruling.
Following the ETF store founder’s remarks, Bloomberg analyst Eric Balchunas provided additional insight, explaining the possible outcomes based on the political climate.
Balchunas estimated that a final deadline for a decision on the SOL ETF would likely be next year, with mid-March 2025 being a reasonable time frame. He stressed that the upcoming US elections in November were a major factor influencing the fate of the proposed investment option, saying that if the current administration were to remain in power, the ETF would likely be rejected.
However, ETF analysts offer a contrasting view, suggesting that if the political landscape shifts in favor of presidential candidate Donald Trump, ETF approval could be a possibility. Balchunas’ comments reflect the sentiments of industry executives on how current regulatory leadership could impact ETFs.
SOL ETF threatened by regulatory standards
Matthew Siegel, head of digital asset research at VanEck, said in a recent Bloomberg interview that the potential introduction of an exchange-traded product (ETP) tied to Solana faces significant challenges under current U.S. regulatory leadership.
Siegel stressed that the likelihood of a Solana ETF’s approval largely hinges on potential changes within the SEC. He explained that the regulator’s strict standards for altcoin ETFs, outlined by current SEC Chairman Gary Gensler, pose significant hurdles that make the proposal unlikely to be approved.
VanEck executives also added that the commission could use the lack of a regulated futures market for SOLs to reject an ETF proposal, although that would not be a requirement for approval.
However, he added that regardless of the upcoming election results, there is likely to be a change in the board’s leadership, which could spur change and provide hope for a Solana ETF approval.
On the other side
- The SEC believes Solana’s security status could pose challenges to ETF approval.
- The market reaction to the Solana ETF has been muted compared to the excitement surrounding the Bitcoin and Ethereum ETFs.
- Speculation is growing Market experts are wondering which altcoin will launch an ETF product next.
Why this matters
The approval of the Solana ETF depends on two major factors: regulatory developments and the SEC. While the SEC’s inherently lukewarm approach to the industry is a significant challenge, several other factors are at play that make it difficult to predict the specific trajectory of the proposal.
Learn more about our sentiment on the Solan ETF so far:
Solana ETF Competition Heats Up as 21 Stocks Compete for SEC Approval
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