Are Solana ETFs Coming Soon? Top Experts Weigh In

Key Takeaways:

• VanEck has filed to introduce a Solana ETF, marking a significant step into the cryptocurrency market.
• Approval for the Solana ETF remains uncertain, with experts suggesting a potential launch in 2025 under different SEC leadership.
• The debate over decentralization complicates the approval process, contrasting Solana's position against other cryptocurrencies like Ethereum.

VanEck, a prominent investment management firm based in New York, has taken another step into the cryptocurrency arena by filing to introduce an ETF that tracks the price of Solana. Despite this initiative, the likelihood of the current administration approving such an ETF remains slim.

This marks the first time a Solana (SOL) ETF has been proposed in the US. Many analysts had foreseen this move, especially after the US Securities and Exchange Commission (SEC) recently approved funds based on Ethereum. However, the prospects for this ETF's approval are still uncertain.

James Seyffart, an ETF specialist at Bloomberg Intelligence, echoed these uncertainties, stating that the fund "might only see a 2025 launch if there's a new administration in the White House and a different SEC leadership." Even then, he cautioned, approval isn't guaranteed.

The ongoing debate about decentralization further complicates the situation. Some believe Ethereum is more decentralized, while others, including Solana developer and Helius founder Mert Mumtaz, argue that Solana is among the top 1% of decentralized networks.

Will Solana ETFs Get SEC Approval? Experts Weigh In

Qureshi highlighted that Bitcoin and Ethereum-based ETFs have a stronger chance of meeting the SEC's market surveillance criteria due to the presence of well-established futures markets. He explained, "Without a listed futures market, meeting market surveillance standards is impossible."

Jake Chervinsky, Chief Legal Officer at Variant Fund, supported Qureshi's view, predicting that the SEC will likely reject the Solana ETF due to its absence of a futures market.

Austin Campbell, an associate professor at Columbia Business School, voiced his doubts regarding the approval of VanEck's application. He suggested that the firm might be trying to "get in early." This move sparks curiosity about whether other firms will follow VanEck's path, similar to the industry's reaction after BlackRock submitted its unexpected spot Bitcoin ETF application in late 2023.

Scott Johnsson, a general partner at Van Buren Capital, proposed that VanEck's application could harm President Biden's reputation due to the prevailing view that his administration is anti-crypto. 

He commended the application as a clever tactic to push the boundaries and scrutinize the SEC's approach to cryptocurrency regulation.

Brian Frye, a law professor at the University of Kentucky, is of the opinion that the final approval of Solana ETFs is inevitable, assuming the market is favorable. He argued that, from a regulatory perspective, Ethereum and Solana are essentially similar. 

Nonetheless, he warned that this process could be prolonged due to the SEC's slow pace and the current leadership's general lack of enthusiasm for crypto and ETF approvals.

FAQs:

• Will the Solana ETF receive SEC approval soon? Experts are skeptical due to the absence of a listed futures market, crucial for meeting SEC market surveillance standards.
• Why did VanEck apply for a Solana ETF despite uncertainties? VanEck aims to position itself early in the market, potentially influencing future regulatory decisions similar to past industry responses.
• How does regulatory perception impact the Solana ETF approval process? Current SEC leadership's cautious stance on cryptocurrencies, including ETFs, could prolong approval despite perceived similarities between Ethereum and Solana.

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