Crypto News – Essential Components in Solana’s ETF Approval Journey: A Comprehensive Look
Crypto News- The buzz surrounding which altcoin could clinch exchange-traded funds (ETFs) approval has intensified lately. Among the contenders, Solana (SOL) shines bright, boasting a significant market presence and a dedicated following.
As the fifth-largest cryptocurrency with a market cap soaring past $66 billion, Solana often earns the moniker “Ethereum killer.” This reputation, coupled with its soaring popularity, positions it as a top contender for ETF approval. But, as with any great endeavor, there are hurdles to clear.
Challenges Abound for Solana’s ETF Ascent
One of the primary stumbling blocks for Solana is the absence of a regulated futures contract market. Unlike Bitcoin and Ethereum, which enjoy futures products listed on major US exchanges like CME and CBOE, Solana hasn’t reached this milestone yet.
In late May, murmurs circulated that the Chicago Mercantile Exchange (CME) had turned down a Solana futures fund. Bloomberg ETF analyst James Seyffart notes that this absence of a regulated futures market poses a significant barrier, potentially extending the wait for approval by years.
Furthermore, securing approval from the Commodity Futures Trading Commission (CFTC), the overseer of futures markets, presents another formidable challenge.
Adding to the complexity, the US Securities and Exchange Commission (SEC) has classified Solana as a security in its legal battles against Coinbase and Kraken. This classification poses a significant roadblock to ETF approval, especially considering that neither Bitcoin nor Ethereum carry such a designation from the SEC.
Doubts Loom Large Among Industry Experts
Industry pundits harbor skepticism regarding the likelihood of Solana and other cryptocurrency ETFs gaining approval.
Nikolaos Panigirtzoglou, JPMorgan’s managing director and global market strategist, expresses doubts about Solana ETFs’ approval, citing the SEC’s ambiguous stance on crypto asset classification.
“We doubt it,” says Panigirtzoglou. “The SEC’s decision to greenlight ETH ETFs is already stretched due to Ethereum’s uncertain classification. It’s improbable that the SEC would extend its approval to Solana or other token ETFs, especially since the SEC leans toward classifying tokens outside of Bitcoin and Ethereum as securities.”
Polymarket, a betting platform, predicts a mere 6% chance of the SEC approving a Solana ETF by the end of 2024. Notably, no major US firms have formally pursued Solana ETF approval with the SEC.
Existing Solana-based financial products in the US include the GrayScale Solana Trust and 21Shares’ Solana Staking ETP (ASOL), which finds its listing on European stock exchanges.
Anthony Pompliano of Pomp Investments, while optimistic about Solana’s future performance compared to Ethereum, observes a conspicuous absence of chatter regarding a Solana ETF in the US.
Despite the buzz surrounding Bitcoin and Ethereum ETF approvals fueling speculation about a Solana-based ETF, significant regulatory obstacles persist. Nevertheless, the Solana community holds onto hope for a favorable outcome in the foreseeable future.
FAQ
What does approval of Solana’s ETF signify?
Approval of Solana’s ETF enables easier access for institutional investors to this crypto asset. This could potentially increase adoption of Solana and boost its price.
What are the regulatory hurdles for approval of Solana’s ETF?
Some primary hurdles for Solana’s ETF approval include obtaining CFTC approval, SEC classification of the asset as a security, and the absence of a regulated futures contract market.
How might approval of Solana’s ETF impact other cryptocurrencies?
Approval of Solana’s ETF could generally increase adoption of cryptocurrencies and add credibility to the sector. This might have a positive impact on other cryptocurrencies and the overall crypto market.
For more up-to-date crypto news, you can follow Crypto Data Space.
Leave a comment