Though analysts predict that the SEC will take a while to approve spot Solana ETF, there is excitement about this prospect.
Analysts believe that despite the high probability of the US Securities and Exchange Commission approving Solana exchange traded funds (ETFs), their debut remains uncertain. ETF analysts claim that the delay could be due to regulatory actions in progress, public comment on filings and pending enforcement. ETF experts believe that before Solana ETFs begin trading, several things could be different for Solana investors.
Eric Balchunas, Bloomberg’s ETF Analyst, explains the latest development after the regulator did not reject the application outright. Senior ETF analysts made the announcement as the SEC began to consider filings for Solana ETFs in the coming week. Securities watchdogs could repeat past events and extend review deadlines to mid-October, as seen in the approval of other crypto-based ETFs.
Solana ETFs’ debut will increase access to products focused on crypto assets that could replicate spot Bitcoin ETFs’ success, since they were approved in January 2024. Both spot Bitcoin and Ethereum are attracting cashflows in the billions from TradeFi institutions, according to market observers. It was this that sparked a surge in the markets for digital assets.
VanEck Canary Capital 21Shares Grayscale Bitwise Bitwise have all taken note of the spot Solana ETFs. Balchunas projects A 70% chance of SOL ETFs’ approval in this year.
Polymarket, a crypto-prediction platform, believes that SOL ETFs will be approved by the SEC on or before December 31. The exact date of the SEC’s approval remains a mystery.
Balchunas acknowledges that the SEC, under interim chair Mark Uyeda, has adopted a crypto friendly stance. However, he admits to being uncertain about how the process of approval will proceed. The SEC, under Gary Gensler’s tenure, had delayed decisions on Bitcoin ETFs at the moment until the court ruled in Grayscale’s favor.
Balchunas also says that not delaying the decision for three attempts would send a fresh signal. He’s optimistic about a quicker approval than during Gensler’s tenure.
Balchunas believes that the Solana ETF will be approved in the next few weeks, but he acknowledges there are a number of things to consider.
Legal Statements
Balchunas states that when SEC gives feedback on the proposed rule changes captured by 19b-4, it would generate momentum for spot Solana ETFs to be released soon. These statements suggest that the SEC has a material relationship with asset managers.
Bloomberg’s senior ETF Analyst is positive about an asset manager meeting the SEC, particularly to discuss questions regarding SOL ETFs. Nevertheless, the analyst believes that SEC enforcement actions in past years are worthy of monitoring. He cites in particular the 2023 lawsuit brought against Coinbase, citing the reference to Solana being a security.
The SEC’s lawsuit against Coinbase has been halted after a New York judge granted the crypto exchange’s motion for an interlocutory appel. Conflicting decisions on the application of securites law to digital assets led to the intervention by the high court.
Balchunas noted that the SEC’s retreat from the legal battle with Brian Armstrong and Coinbase, as well as the dropping of Solana allegations would be a good sign for approval momentum.
Atkins’ nomination by Trump as SEC chairman is likely to be a factor in the upcoming Senate hearing. Positive signals would be created by a statement that relates to the approval of crypto-focused ETFs.
Does Solana ETF have a bag?
Analysts believe the crypto-friendly attitude of Trump Administration has already convinced them that conditions have been met for Solana ETFs to be approved. Juan Leon, Bitwise’s investment strategist, ruled out the conclusion that the Solana ETF was in the bag despite the recent change in SEC.
SEC rejected the Bitcoin spot ETFs in the past, citing potential market manipulation and fraud. Grayscale’s legal win in 2023 prompted the SEC to approve spot Bitcoin ETFs last year.
Washington DC appellate court held that Grayscale’s denial to convert the trust fund into a spot ETF, was arbitrarily denied. The judges noted that the agency had approved the Bitcoin ETFs, and that it was a regulated market that addressed any concerns of fraud or manipulation.
This week, Coinbase Derivatives announced Solana Future Contracts under the US Commodity Futures Trading Commission. Leon believes that the SEC may eventually drop its consideration of regulated futures market regulation if this is in place. The Coinbase action likely had the same result. The SEC is more likely to approve the Solana ETF if the SEC has approved the Coinbase move.
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Source: e-cryptonews.com
