Is a Solana Spot ETF Imminent? Expert Insights

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Amid regulatory anticipation, market analysts eagerly await the SEC’s decision to approve or disapprove an Ethereum ETF. Analysts are betting high on potential approval, sending major waves through financial circles. Speculations suggest that altcoins like Solana (SOL) could be added if an Ethereum ETF is approved. Analysts believe this could trigger a domino effect, leading to more spot ETFs for various cryptocurrencies. 

Chorus for Spot Solana ETF Grows

CNBC Guest believes $Sol will have the Next Spot ETF pic.twitter.com/M79fSC6uJy

— Joshua Jake (@itzjoshuajake) May 22, 2024

BKCM CEO Brian Kelly recently speculated in a CNBC interview that Solana might be the next cryptocurrency to receive an ETF. Rumors from Hong Kong also suggest that an issuer is preparing for a SOL ETF. However, Solana faces unique challenges. Unlike Ethereum, it currently lacks a futures ETF and has been classified as a security by the SEC, complicating its ETF prospects. On top of that, a major ETF issuer has shown disinterest in launching ETFs beyond Bitcoin and Ethereum.

Altcoins vs Bitcoin: Analyst Weighs In

Based on current precedent/needs — Will happen within a few years of getting a CFTC regulated futures market. But congress & Market structure bills like FIT21 could make it happen quicker.

I think a SOL ETF would see most demand vs other digital assets (aside from BTC & ETH)

— James Seyffart (@JSeyff) May 22, 2024

Bloomberg analyst James Seyffart suggested that the CFTC approval of a futures ETF could benefit a Solana SPOT ETF. The FIT21 Crypto Bill might expedite this process. Despite these prospects, Seyffart also noted a lack of demand for ETFs for other altcoins like Litecoin (LTC) and Dogecoin (DOGE).

Cinneamhain Ventures partner Adam Cochran suggested that Litecoin (LTC) or Dogecoin (DOGE) might be more likely candidates for the next spot ETF due to their proof-of-work consensus mechanisms aligning more closely with regulatory expectations.

At the same time, Bitwise Investment CEO Hunter Horsley argued against the need for separate ETFs for altcoins, stating that Bitwise’s 10 Crypto Index Fund already exposes investors to Bitcoin, Ethereum, Solana, and the top seven other altcoins.

Opposition from Bitcoin Maximalists

CNBC is already talking about a Solana ETF.

This is the problem with including ETH into the spot ETF game. They’ve opened Pandora’s box of shitcoins.

Looks like we’re about to have the free market casino everyone’s begged for.

I’ll stick to #Bitcoinpic.twitter.com/e2FOQaxtgc

— The ₿itcoin Therapist (@TheBTCTherapist) May 22, 2024

Bitcoin maximalists strongly oppose the potential introduction of a Solana ETF. “The Bitcoin Therapist,” a notable Bitcoin maximalist, raised concerns on CNBC, arguing that the inclusion of Ethereum in the spot ETF market has led to a flood of lesser-known cryptocurrencies, often called “shitcoins.” He believes that expanding the ETF market to include altcoins like Solana could dilute the perceived value and legitimacy of Bitcoin.

However, the chance of an ETH ETF approval remains doubtful due to regulatory issues with Ethereum and Solana. If an ETF is approved, it signifies approval of their legal status, which could complicate the process in the US. It’s worth noting that Solana currently lacks a futures-based ETF in the US.