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Solana futures ETF seen as the more likely path to US approval

Solana futures ETF seen as the more likely path to US approval

GrafaGrafa2024/09/11 00:25
By:Liezl Gambe

After the recent approvals of Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH) Spot ETFs in the United States, there is growing speculation about whether Solana (CRYPTO:SOL) could be next in line. 

While some countries like Brazil have moved forward with Solana Spot ETFs, the path to approval in the US remains challenging. 

2024 has been a landmark year for exchange-traded funds (ETFs) in the crypto industry. 

The approval of the Bitcoin Spot ETF by the SEC in January led to a significant price rally and major changes in the market

Later, Ethereum followed suit with its own spot ETF approval. 

Given this momentum, many are wondering which cryptocurrency might be next. 

Solana, a blockchain platform known for its proof-of-stake model and smart contract system, is often mentioned as a potential candidate due to its similarities with Ethereum. 

However, the path to a Solana Spot ETF in the US is complicated. 

The SEC considers a Spot ETF to be a gold standard for regulatory approval, only granted to assets that are seen as safe and stable. 

Unlike Tether or Binance Coin (BNB), which are influenced by their issuing companies, Solana's decentralized nature makes it a stronger candidate. 

Still, recent history shows that even approved crypto ETFs can struggle. 

For example, Ethereum's Spot ETF saw outflows of $458 million shortly after launch, raising doubts about whether a smaller asset like Solana would fare better. 

Brazil recently approved two Solana Spot ETFs, making it the first country to take this step. 

However, this has not eased concerns in the US. 

Eric Balchunas, a Bloomberg ETF analyst, stated that a Solana Spot ETF has "a snowball’s chance in hell of approval unless there’s a change in leadership." 

The SEC has already dismissed applications for a Solana Spot ETF by CBOE before they even reached a decision stage. 

Yet, not all hope is lost for Solana ETFs in the US. 

According to Matthew Sigel, Head of Digital Assets Research at VanEck, Solana could still be considered a commodity under certain legal precedents, potentially opening the door for a Solana Spot ETF. 

However, this is a narrow argument that would likely face many hurdles. 

Many experts, including Nate Geraci of ETFStore, believe that a Solana Futures ETF is a more achievable goal. 

Futures ETFs have looser restrictions and could pave the way for broader acceptance. 

This route would also involve regulation by the Commodity Futures Trading Commission (CFTC), which is generally viewed as having more lenient standards compared to the SEC. 

For now, while a Solana Spot ETF in the US seems unlikely, a Futures ETF could serve as a significant stepping stone. 

As Brazil moves forward with its Solana Spot ETFs, the crypto community is closely watching how these developments unfold. 

While approval by the end of 2024 is doubtful, the effort to gain acceptance for a Solana ETF in the US is far from over. 

The path may be difficult, but Solana advocates remain optimistic that they can eventually achieve their goal, much like how Bitcoin has transformed from an outsider to a key player in global finance. 

At press time, the Solana (SOL) price was $135.39.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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