Sat 16 Nov 2024 ▪
4
min reading ▪ by
Luc Jose A.
The race for crypto ETFs is taking a decisive turn. As the United States struggles to approve funds beyond Bitcoin and Ether, cautious optimism now surrounds Solana. According to Matthew Sigel, head of crypto research at VanEck, the chances of a Solana ETF being approved before the end of 2025 are “significant”. This issue goes beyond the technical framework, because it illustrates a potential change in regulatory attitude, favored by recent political upheavals and increasing market dynamics.
Favorable political and regulatory dynamics
Anticipation around a Solana ETF is largely based on recent developments in the US political landscape. Thus, the re-election of Donald Trump could transform the approach of the Securities and Exchange Commission (SEC). Under the Biden administration, the SEC has taken a tough stance, as it has taken over 100 regulatory actions against crypto companies. In contrast, Trump, known for his pro-economic freedom positions, could appoint libertarian leadership to the SEC, which would facilitate the introduction of new financial products.
“We expect the SEC to approve more crypto products than it has in the last four years,” Sigel said. He adds that this new situation could pave the way for a Solana ETF as early as next year. Filings for similar funds, which include XRP and Litecoin, signal an increased desire by asset managers to diversify the options available to investors. A similar dynamic is observed in Europe, where more than 30 crypto ETFs are already in circulation.
Towards a diversification of investment opportunities
The prospect of a Solana ETF is part of a global strategy for the democratization of cryptos. These funds offer investors simplified and regulated exposure to cryptos, without requiring their direct management. Such a product could accelerate the adoption of altcoins among a still reluctant institutional audience. According to Eric Balchunas, analyst at Bloomberg Intelligence, the current filings are seen as “call options on a Trump victory.” This hypothesis reflects confidence in a more permissive regulatory climate.
Aside from the immediate effect on Solana, such a development would transform the crypto ecosystem as a whole. Matt Hougan, chief investment officer at Bitwise, notes that regulatory “headwinds” have held back innovation and adoption. “Imagine what will happen when these barriers disappear,” he emphasizes. In the long term, it could also encourage regulators to standardize approval criteria for ETFs indexed to baskets of cryptos, which would further expand the universe of crypto investments.
The potential arrival of a Solana ETF does not exclusively mark a step forward for this network, but announces a decisive step towards the standardization of cryptos. This product would help bridge the gap between traditional finance and decentralized finance. If the predictions come true, 2025 could become a pivotal year for the industry, with massive investment flows, which would consolidate the position of altcoins in institutional portfolios. The question remains, however: will regulators be ready to support this movement? Time will tell.
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Luc Jose A.
A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I took the commitment to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to relay the latest technological innovations and to put into perspective the economic and societal issues of this ongoing revolution.
