29 May, 2024

Solana Tops Contenders for Next Crypto ETF

Susan Oh
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Susan Oh
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Susan Oh is a leading figure in the integration of AI and blockchain for social good, serving as the CMO for BeOmni by Beyond Imagination and a civic technologist dedicated to creating scalable solutions. She is a board member of the Blockchain Commission For Sustainable Development supported by the UN GA Office of Partnerships, and...
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Solana Tops Contenders for Next Crypto ETF
Key Takeaways
  • Solana is the top contender for the next crypto ETF after the turning point of Bitcoin and Ethereum ETF approval.
  • Future crypto ETFs operate in a new political and regulatory landscape after a string of wins for the industry.

Solana Tops Contenders for Next Crypto ETF

Speculation over the next token to receive its own crypto ETF is rising after a dramatic shift in the political and regulatory landscape.

Solana (SOL) has emerged as the top contender due to its similarity to Ethereum (ETH) as well as its large market capitalization.

Solana is by far the fastest-growing major crypto token and is used extensively by a wide variety of projects in the industry.

ETF issuers have argued that there is no significant pressure to expand beyond Bitcoin and Ethereum.

However, the explosive growth in ETFs of every type and size over the last decade shows that the perception of demand is not a significant barrier to issuance.

Solana Logo
Solana Logo | Source: Solana

There are a few hurdles before Solana gets approval as the next crypto ETF.

The biggest issue is that Solana has been caught up in the ongoing legal struggles between U.S. crypto exchanges and the SEC.

Solana has been deemed an ‘unregistered security’ by the SEC in its cases against Coinbase and Kraken.

Critics of the SEC have argued that this designation cannot hold in the face of ETF approval for the similar token, Ethereum.

However, there will need to be clear U.S. regulations for the industry before this type of legal inconsistency is eliminated.

The New Landscape for Crypto ETFs

The most powerful argument for approval of a Solana ETF is that it appears the rules have changed for the crypto industry in general.

Whereas the earliest crypto ETFs were only approved reluctantly and over a long timeline, the sudden approval of the spot Ethereum ETF has signaled a change.

This approval also followed industry-backed crypto regulation passing a House vote and a flurry of positive commentary from both Republicans and Democrats. 

Supporters of a Solana ETF argue that the way has been paved for crypto ETF approval in general. 

Therefore, there is no reason that tokens with sufficient market capitalizations, such as Solana, cannot be rapidly approved.

“The Solana ETF will happen within a few years of getting a CFTC-regulated futures market, but Congress and market structure laws like FIT21 could speed up the process.”

– James Seyffart, ETF analyst at Bloomberg, stated.

Strong Case for Solana

Solana Price Chart
2024 Solana Price Chart | Source: Tradingview 

Solana has benefited the most from the recent crypto bull run.

Solana has seen its value increase around 10-fold in the last year, at one point reaching approximately 210 USD.

This rise can be credited to its widespread use in the crypto industry by a large variety of different projects.

Solana’s user-friendly interface, transaction speed and low fees have made it a favorite for minting NFTs and memecoins.

Above all else, ETF issuers are looking for large market capitalizations, brand recognition and stability.

Solana excels in all these requirements, making it by far the top contender for the next crypto ETF.