Solana
Solana ETF Approval: What’s Needed Now
The discussion about which altcoin could next gain exchange-traded fund (ETF) approval has intensified. Among the candidates, Solana (GROUND) stands out for its significant presence on the market and its strong audience.
Solana, the fifth largest cryptocurrency with a market capitalization over $66 billion, is often referred to as the “Ethereum killer.” This reputation, along with its popularity, makes it a prime candidate for ETF approval. However, to obtain this approval, significant obstacles must be overcome.
Obstacles to Solana ETF Approval
One of the main challenges for Solana is the lack of a regulated system. eventually contract market. Unlike Bitcoin and Ethereum, which offer futures products listed on major US exchanges such as CME and CBOE, Solana has not reached this milestone.
Rumors at the end of May suggested as the Chicago Mercantile Exchange (CME) refused to quote a Solana futures contract funds. According to Bloomberg ETF analyst James Seyffart, this lack of a regulated futures market poses a significant hurdle that could take years to overcome.
“Based on precedent and current needs, this will occur within a few years of obtaining a CFTC-regulated futures market. But Congressional and market structure bills like FIT21 could make this happen more quickly,” Seyffart said. note.
Another significant hurdle is approval from the Commodity Futures Trading Commission (CFTC), which oversees the futures markets.
Moreover, in his lawsuits against Coinbase and Kraken, the United States Securities and Exchange Commission (SEC) has classified Solana as a security. This classification presents a major obstacle to obtaining approval for ETFs, as neither Bitcoin nor Ethereum are designated as securities by the SEC.
Industry experts remain skeptical
Several industry experts are skeptical about the likelihood of Solana and other cryptocurrency ETFs.
For example, Nikolaos Panigirtzoglou, JPMorgan managing director and global market strategist, expressed doubts about the approval of Solana ETFs, citing the SEC’s unclear stance on the status of various crypto assets.
“We doubt it. The SEC’s decision to approve ETH ETFs is already pushed given the ambiguity over whether Ethereum should be classified as a security or not. We do not believe the SEC would go even further in approving Solana or other tokenized ETFs given that the SEC has a stronger view (compared to Ethereum) that tokens outside of Bitcoin and Ethereum should be classified as titles,” Panigirtzoglou said.
Betting on Polymarket, on the other hand, predicts only a 6% chance that the SEC will do so. approve a Solana ETF by the end of 2024. Meanwhile, no major US companies have officially filed for approval of the Solana ETF from the SEC.
Current Solana-based financial products in the United States include the GrayScale Solana Trust and 21Shares’ Solana Staking ETP (ASOL), which are listed on European exchanges.
“I think Solana will outperform Ethereum in the future. So far I think this has been true, but I’m not hearing of any talk of a Solana ETF in the US,” Anthony Pompliano, investor at Pomp Investments, said.
Solana ETF Approval Ratings. Source: Polymarket
Although the approval of Bitcoin and Ethereum ETFs has fueled speculation about a Solana-based ETF, significant regulatory challenges remain. Nevertheless, the Solana community remains hopeful for a favorable outcome in the near future.
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