Analysts Weigh In on Solana ETF Prospects Amid Fresh Filings

Two analysts have offered insights on the likely fate of Solana ETFs, highlighting regulatory standards and political developments.

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  • Solana ETFs have become the latest in the ongoing ETF conversation in the industry.
  • Industry analysts are debating the potential of an approval.
  • Suspense mounts regarding how political development may impact the proposals.

The year-long exchange-traded funds (ETFs) buzz, which has seen the approval and proposal of both Bitcoin and Ethereum ETFs, respectively, has recently shifted to Solana following VanEck’s inaugural filing in June 2024. Since then, debates have emerged across the industry on the prospects of approval, marked by optimism and hesitation on the fate of the proposed investment vehicle.

At the latest, a new filing related to the proposals has prompted additional opinions from analysts on whether a launch is likely.

Solana ETFs: Likely or Unlikely?

Following the filing of Form 19b-4s with the Securities and Exchange Commission (SEC) for both VanEck and 21Shares Solana ETFs by the Cboe stock exchange on Monday, July 8, 2024, ETF Store founder Nate Geraci emphasized that the acknowledgment of these filings would start the countdown to a verdict.

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The ETF store founder’s comments were followed by additional insights from Bloomberg analyst Eric Balchunas, who outlined possible outcomes based on political developments.

Balchunas estimated that the final deadline for a decision on the SOL ETFs will likely fall next year, with mid-March 2025 as a plausible timeframe. He highlighted the upcoming November US elections as a significant factor influencing the fate of the proposed investment option, suggesting that if the current government remains in power, the ETFs are likely to face rejection.

The ETF analyst, however, offered a contrasting viewpoint, suggesting that if the political landscape shifts to favor presidential candidate Donald Trump, there could be a chance of approval for the ETFs. Balchunas’ comments echo the sentiments of an industry executive on how the present regulatory leadership could impact the ETF.

SOL ETFs Threatened by Regulatory Standards 

According to VanEck’s Head of Digital Assets Research, Matthew Sigel, in a recent Bloomberg interview, the potential introduction of exchange-traded products linked to Solana faces significant challenges under the current regulatory leadership in the United States.

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Sigel emphasized that the likelihood of a Solana ETF’s approval hinges largely on potential shifts within the SEC. The regulatory body’s stringent criteria for altcoin ETFs, outlined by the present SEC Chair Gary Gary Gensler, he explained, pose considerable obstacles, suggesting slim chances for proposal approval.

The VanEck executive further noted that the commission could use the absence of a regulated futures market for SOL, while not a requirement for approval, to reject the ETF proposals. 

He, however, added that a change in the commission’s leadership is expected regardless of the upcoming election outcome, which might facilitate a shift and offer hope for a potential Solana ETF approval.

On the Flipside

  • In the SEC’s view, Solana’s security status may pose a challenge to the ETF approval.
  • Market response to a potential Solana ETF has remained flat compared to the excitement witnessed for its Bitcoin and Ethereum ETF counterparts.
  • Speculation is growing among market watchers about which altcoin will be the next to have an ETF product.

Why This Matters

The approval of a Solana ETF hinges on two key factors: regulatory developments and the SEC. While the SEC’s inherently lukewarm approach to the industry poses a significant challenge, several other factors also come into play, making it difficult to predict a certain trajectory for the proposals.

Discover more about the feelings so far for Solan ETFs:
Solana ETF Race Heats Up as 21 Shares Vies for SEC Approval

Read this article to understand how SSV is championing ETH staking and its latest milestone:
SSV Network Hits Major Milestone as It Looks to the Future

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

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Grace Abidemi

Grace Abidemi, a cryptocurrency reporter at DailyCoin, covers industry developments and trends. She previously worked as a freelance writer. With a Bachelor's degree in German Language and certifications in marketing and storytelling, Grace creates engaging content. When not working, she's in Nigeria, mastering cooking and canvas painting, and enjoys learning about different cultures and languages.