- SEC approved Ethereum ETFs on May 23, 2024.
- Analysts predict high demand for Solana ETFs.
- Cryptos such as Litecoin, Dogecoin are also potential candidates.
The U.S. Securities and Exchange Commission’s (SEC) recent approval of Ethereum ETFs has been one of the most significant developments for the crypto industry in recent months. Soon, Ethereum will potentially see expanded liquidity, as traditional finance jumps on the crypto trend.
Furthermore, the decision has opened up roads for other tokens to do the same. Solana is the most likely next candidate for the crypto ETF, and it could benefit the most from the regulatory shift.
SEC’s Regulatory Shift and What It Means for Solana
On Thursday, May 23, the U.S. Securities and Exchange Commission (SEC) made a groundbreaking decision to approve Ethereum exchange-traded funds (ETFs). The decision came after the SEC approved spot Bitcoin ETFs earlier, influenced by a court ruling against the agency.
Sponsored
Ahead of the Ethereum ETF ruling, the SEC came under significant pressure from legislators. A bipartisan group of U.S. lawmakers, including Financial Committee Vice Chairman Rep. French Hill and House Majority Whip Tom Emmer, urged the agency to apply rules consistently.
They argued that if the SEC approved the Bitcoin ETFs, it should also approve Ethereum ETFs. This logic could also be applied to other crypto ETFs. This is especially significant for Solana, which investors argue is the most likely next token to get its own ETF.
Why Solana is Uniquely Positioned to Get ETFs
The approval of ETFs could significantly boost the demand for Ethereum, and other tokens that get approved. Since their approval less than six months ago, Bitcoin ETFs have already attracted over $12 billion in net inflows.
This is good news for Solana, which analysts predict will be the next token to get its own ETF. Bloomberg analyst James Seyffart predicts high demand for Solana ETFs, likely surpassing other altcoin funds.
Moreover, a recent report by the wealth management firm Bernstein calls Bitcoin, Ethereum, and Solana the “big three” of crypto, making Solana the natural candidate for the next crypto ETF.
However, Solana faces a significant hurdle. Unlike Ethereum, the SEC has already classified Solana as a security. For that reason, it is unclear whether the agency would apply the same principles to SOL. Still, other altcoins are at a similar disadvantage, with the SEC’s Gary Gensler considering all crypto tokens, other than Bitcoin, as securities.
Still, the recently approved Financial Innovation and Technology for the 21st Century Act (FIT21) aims to establish a comprehensive legal framework for cryptocurrencies. This legislative change will significantly impact how agencies like the SEC treat crypto assets.
On the Flipside
- Solana is not the only cryptocurrency vying for ETF approval. Due to its similarity to Bitcoin, Litecoin has a clearer regulatory path to approval.
- Dogecoin is also a potential ETF candidate, due to its decentralization and strong community.
Why This Matters
The potential approval of Solana ETFs could significantly impact the cryptocurrency market. It would not only validate Solana’s position as a leading blockchain platform but also attract substantial institutional investment.
Read more about the ETH ETF approval:
BREAKING: SEC Approves All Spot Ether ETFs in Total Pivot
Read more about the decentralized infrastructure expansion:
Dabba Adds 10,000 DePIN Hotspots for Underserved Markets
