Spot ETFs on Solana
Two applications were submitted to the US Securities and Exchange Commission (SEC) for spot Solana-ETFs on June 27 and 28. Authors
become VanEck and 21Shares. It’s worth noting that the same players were among those filing for Bitcoin and Ethereum spot ETFs. In general, this is quite an interesting step on the part of VanEck and 21Shares. Ether spot ETFs have not yet been fully approved, but the race for new products is already beginning. What’s the matter?
Interesting is the opinion of Bloomberg Intelligence ETF analyst James Seyffart:
“I think VanEck’s filing is something like a call option on the November election. Under the current leadership of the Securities and Exchange Commission (SEC), a Solana ETF should be rejected, since there is no federally regulated market for such futures. However, a new White House administration and new SEC leadership, if they prove more accommodating to crypto policy, could theoretically
can change situation.”
VanEck and 21Shares both chose to time their filings just before the first presidential debate, which resulted in a victory for Donald Trump. But Nate Geracci, president of investment advisory firm ETF Store, believes that the main challenge to a Solana ETF will not just be the SEC or the presidential administration, but the status of the cryptocurrency itself:
“Given the fact that Solana futures are not traded on the Chicago Futures Exchange (CME), the only realistic path to approval of a Solana spot ETF would be the implementation of a legislative regulatory block that would clearly define which cryptocurrencies are classified as securities and which are classified as securities. goods. Or the SEC will have to agree that Solana is a commodity without the characteristics of a security. Otherwise, the agency will need free access to joint supervision of unregulated cryptocurrency exchanges. All of this is highly unlikely, making the VanEck and 21Shares bids bets on a friendlier government.”
It’s worth noting that the companies that filed the paperwork for the Solana spot ETFs declined to comment on whether their actions were a bet on a Trump victory. Is it realistic that investment companies will now start applying en masse for exchange-traded funds for other altcoins?
XRP and Cardano ETFs
At the end of June, there is not a single spot ETF for any altcoin whose shares would be traded on stock exchanges. In its next statement, the SEC invited applicants to amend Form S-1 by July 8: we are talking about applications to funds for ether ETFs. Thus, the start of trade in these products, expected by many, became less realistic. Obviously, it will come to other altcoins even later. For now there is only talk.
The loudest voices have come from Ripple CEO Brad Garlinghouse, who said back in late May that it was only a matter of time before an ETF for XRP, Solana, and Cardano would be approved. The only problem that is currently preventing this is
is a lack of transparency The businessman believes in the actions of regulators.
It is obvious that Garlinghouse’s hopes are far from being realized. We should expect the issue with ETFs for ether to be resolved in the near future. Perhaps later hands will come to applications for Solana. ETFs for XRP and Cardano are not even in anyone’s project yet. So far, no one even influential has spoken about exchange-traded funds for other altcoins.
Should we really wait for new exchange products? Will altcoin ETFs take the crypto market to the skies? Or will the effect be local?
The Impact of Altcoin ETFs on the Crypto Market
It is impossible to say for certain what will happen with 100% probability. But you can see how the market reacted to spot crypto ETFs: either already launched or awaiting approval.
Let’s start with Bitcoin exchange-traded funds. They were launched in January 2024. What happened immediately after? Bitcoin fell in price by more than 20%. There was no immediate boom. Of course, there will be those who will say that Bitcoin then soared, from the end of January to March, almost doubling. Yes. But this can equally likely be attributed to the pre-halving rally.
Source: tradingview.com
If you think that only the cryptocurrency flagship was adjusted, then you are mistaken. Ether fell by the same 20% in those days.
Source: tradingview.com
Now let’s turn to the end of May 2024. On the 23rd, the SEC approved spot ETFs on Ether. What happened to the crypto market? Bitcoin stayed sideways for a couple more weeks, after which it corrected to the $60,000-$61,000 region.
Source: tradingview.com
A similar fate – correction – befell the ether. The decrease was more than 10%.
Source: tradingview.com
Finally, let’s touch on the applications that were not approved or reviewed, but appeared. This is an ETF on Solana. Bitcoin did not react. Consolidation continued in the range of $60,000-$61,000.
Source: tradingview.com
A similar situation has developed with the airwaves. Trading sessions on June 27 and 28 balanced each other: first ETH added a little more than 2%, then lost. And on June 29 and 30, the price remained virtually unchanged.
Source: tradingview.com
The real effect could only be observed in Solana itself, which on June 27 jumped up by 9.1%. True, the euphoria soon ended. Already on June 28, SOL sank by 6.35%.
Source: tradingview.com
Thus, events directly related to ETFs in none of the cases led to massive growth in the crypto market. The situation with Solana led exclusively to an increase in its own quotes. At the same time, the growth was of an explosive nature. The very next day, investors began to take profits.
So, will there be a boom based on new news about ETFs?
ETFs in the future
If anything happens, it will be local. The crypto market continues to follow Bitcoin. The dominance of the first cryptocurrency is still more than 54%. ETFs, no matter what anyone says, remain a quasi-product that does not give investors the direct right to own cryptocurrency. In addition, if the first time, before the approval of spot exchange-traded bitcoin funds, there was a novelty effect, then with each new time the public will react more calmly to the emergence of new investment products.
Conclusion
Spot ETFs on Solana are not only an innovative step for the crypto industry, but also a bet on a change in the US president or at least a change in policy, albeit indirectly. The applications did not lead to a massive rally in the crypto market. Growth was observed only in Solana itself, but it was corrected the next day. You should not expect a widespread boom from ETFs on other altcoins.
This material and the information in it are not individual or any other investment recommendation. The opinion of the editors may not coincide with the opinions of the author, analytical portals and experts.
Source: Bits
I am an experienced journalist, writer, and editor with a passion for finance and business news. I have been working in the journalism field for over 6 years, covering a variety of topics from finance to technology. As an author at World Stock Market, I specialize in finance business-related topics.
