VanEck has submitted proposals to the US Securities and Exchange Commission to establish a spot Solana exchange-traded fund (ETF)
If there is a leadership transition, market experts believe the Solana ETF can be approved.
The VanEck Solana Trust will reflect the price of the native SOL token of the blockchain network if it is approved. Nevertheless, the filing indicated that the Trust does not intend to stake the SOL tokens for staking rewards.
However, the application’s announcement resulted in a 10% increase in SOL’s price, now at nearly $150. Within the last hour, the abrupt price increase resulted in the loss of over $5 million from short traders speculating on the price, as per Coinglass data.
The reason for VanEck’s filing for a place in the Solana ETF
VanEck’s director of digital research, Matthew Sigel, elucidated the reasons for the company’s application, highlighting that the SOL token functions as a commodity.
Sigel observed that Solana is an open-source blockchain platform for various applications, including social interactions, trading, gambling, and payments. He believes Solana’s robust attributes, such as a vibrant community, stringent security protocols, affordable transaction fees, and high throughput, make it a favorable candidate for an ETF.
Additionally, he stated:
“We believe the native token, SOL, functions similarly to other digital commodities such as Bitcoin and ETH. It is utilized to pay for transaction fees and computational services on the blockchain. Like ether on the Ethereum network, SOL can be traded on digital asset platforms or used in peer-to-peer transactions.”
Is it likely to be approved?
Eric Balchunas, Bloomberg’s senior ETF analyst, emphasized that the spot ETF approval prospects could be impacted by the absence of a SOL futures product.
:max_bytes(150000):strip_icc()/eric-balchunaseric-balchunas-3744-7d148eab834043e1a8bb1f94aec58696.jpg "VanEck Files For Spot Solana ETF, But Will it Gain Approval? - Protechbro")
Nevertheless, he observed that a change in the leadership of the United States presidential office could potentially facilitate approval, particularly under a pro-crypto SEC leadership, such as Hester Peirce. He stated:
“The knee-jerk reaction here is, ‘Oh, this will never be approved because there aren’t Solana futures, ‘ I agree, but.. if there is change at POTUS, I think anything possible. Just imagine Hester Peirce (or someone like that) running the SEC.”
The CLO of crypto fund Variant Fund, Jake Chervinsky, further elaborated:
“There’s nothing preventing the SEC from approving a spot crypto ETF without a futures market. It’s just how the agency has interpreted the Exchange Act, but that could change under new leadership.”
In the interim, market analysts asserted that the ETF application proves that the industry is progressing toward mainstream financial acceptability. Cryptocurrency has garnered substantial attention among Americans in the past year, particularly following the introduction of spot Bitcoin ETFs in January.
