What needs to happen for a Solana Spot ETF?

A Solana Spot ETF in the U.S. is the next big milestone the crypto world is looking forward to. But there are many obstacles. Here's what experts think.

In this article you will read:

• How realistic an endorsement is

• What regulatory hurdles a Solana ETF must overcome

• What arguments are used to convince the SEC

For months there has been an ETF fever in the crypto world. First Bitcoin, now Ethereum: Wall Street's appetite for these financial products seems insatiable. That is why it did not take long for the first asset managers to look for the following "big thing" - a Solana Spot ETF. But how realistic is this idea really? What needs to happen for Solana to go public? And what regulatory obstacles stand in the way? Experts Matthew Sigel and Max Shannon take a closer look at these questions.

SOL has been experiencing a huge comeback for a year now - from the depreciated FTX coin back to the top of the most valuable altcoins on the market. Its strong performance caused institutional players to show interest again. Including asset manager Hamilton Lane, which recently announced the creation of a new fund to boost tokenization on Solana.

At the same time, calls in the U.S. for its own Spot ETF on Solana grew louder. Asset manager VanEck filed its own application with the Securities and Exchange Commission (SEC) in late June. And this while experts were previously skeptical of an approval. So explains Max Shannon of CoinShares:

"The chances of a Solana ETF being launched are slim because there is no futures market on the CME, for example. However, for the approval of previous crypto-ETFs such as Bitcoin or Ethereum, this was an important criterion for the SEC."

In addition, the SEC must determine whether Solana is a security. The U.S. securities watchdog is particularly troubled by the coin's staking properties. Whether, as with Ethereum, the authority will depart from its position with Solana is currently unclear.

"Solana is a commodity."

There are certainly arguments that could change the SEC's mind, Matthew Sigel believes. The head of Digital Assets Research at VanEck sees many similarities between Solana and the rival altcoin leader.

"SOL works similar to other digital assets such as Bitcoin or Ethereum. The coin is used to pay transaction fees and other services. Moreover, Solana is decentralized; no middleman controls the network."

Sigel cannot understand the SEC's objections to staking: "There are a growing number of court decisions that weaken the SEC's objections to Proof-of-Stake tokens such as ETH or SOL." Given these circumstances, VanEck believes that "SOL shares enough properties with ETH to be considered a commodity." VanEck is ready to present these arguments to the SEC, Sigel explained.

The big question remains, however, when an ETF could realistically be launched. Experts expect approval next year at the earliest - and that too only if there is a changing of the guard in the White House. But if a Solana ETF comes along, it could give the stock price a huge boost, Sigel believes: "Solana is the second largest open-source app store in the world. If the network can snatch more market share from Ethereum, there is huge course potential."