Crypto investor and trader Brian Kelly has suggested that Solana (SOL) could potentially become the next cryptocurrency to have a spot exchange-traded fund (ETF) in the United States. Kelly, who serves as the founder and CEO of the BKCM Digital Asset Fund, highlighted Solana as a potential contender for an ETF spot, alongside Bitcoin and Ethereum. However, not everyone shares Kelly’s optimism. President of The ETF Store, Nate Geraci, expressed skepticism, stating that a spot Solana ETF might not materialize until a Solana futures product is listed on a major exchange or until Congress establishes a clear regulatory framework for cryptocurrencies beyond Bitcoin and Ethereum.
James Seyffart, an ETF analyst at Bloomberg, echoed Geraci’s sentiments, predicting that the launch of a spot Solana ETF could be years away, contingent upon regulatory milestones such as approval from the Commodity Futures Trading Commission (CFTC). Despite the potential demand for a spot Solana ETF, regulatory hurdles, especially the SEC categorizing Solana as a security in lawsuits against Coinbase and Kraken, pose challenges for potential ETF applicants. Adam Cochran, a partner at Cinneamhain Ventures, suggested that Litecoin (LTC) or Dogecoin (DOGE) might beat Solana to the ETF race due to perceived cleaner regulatory pathways.
While few ETF issuers have openly discussed the possibility of filing for a spot Solana ETF, Franklin Templeton, a trillion-dollar asset management firm, recently praised Solana and its founder Anatoly Yakovenko, fueling speculation about a potential Solana ETF launch in the future. Fidelity made an amended S-1 application to the SEC for its spot Ether ETF, specifying that the underlying Ether tokens of the ETF will not be staked. The speculation around spot Ether ETF approvals also provided a boost to spot Bitcoin ETFs, with BlackRock’s iShares Bitcoin Trust (IBIT) witnessing a substantial inflow of $290 million on May 21, signaling a reversal in the trend of zero or minimal inflows observed over the past six weeks.
On a recent episode of CNBC’s ‘Fast Money’, Brian Kelly posed the question, “The trade now is, who’s next?” suggesting that Solana could potentially be the next cryptocurrency to have a spot ETF in the US. However, Nate Geraci, president of The ETF Store, expressed skepticism, indicating that a spot Solana ETF might not materialize until regulatory milestones are met. ETF analyst James Seyffart echoed this sentiment, suggesting that a spot Solana ETF launch could be years away due to regulatory challenges and the categorization of Solana as a security by the SEC.
Despite the obstacles, there is potential demand for a spot Solana ETF, with some speculating that it could surpass other digital assets outside of Bitcoin and Ethereum. Franklin Templeton’s praise for Solana and its founder has fueled further speculation about the potential interest of trillion-dollar asset management firms in launching a Solana ETF. Meanwhile, Fidelity’s amended S-1 application for its spot Ether ETF and the speculation around spot Ether ETF approvals have provided a boost to spot Bitcoin ETFs, with BlackRock’s iShares Bitcoin Trust witnessing a substantial inflow of $290 million on May 21, marking a significant change from recent trends.
The approval and launch of a spot Solana ETF could potentially open up new investment opportunities for cryptocurrency investors, providing easier access to the digital asset market. While Solana faces regulatory challenges and competition from other cryptocurrencies like Litecoin and Dogecoin, the potential demand for a spot Solana ETF remains high, with industry experts closely monitoring regulatory developments and market trends. As the SEC continues to navigate the evolving cryptocurrency landscape, the future of spot ETFs for digital assets, including Solana, Bitcoin, and Ethereum, remains uncertain but promising for investors looking to diversify their portfolios with cryptocurrencies.
