Spot Solana ETF Approval Unlikely as SEC Halts New Filings

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As a researcher who has been closely following the crypto market for several years now, I must say that the recent turn of events regarding Solana ETF approval is quite disheartening. It seems like we are stuck in a never-ending game of regulatory ping-pong, with the SEC’s stance on new crypto ETFs remaining as elusive as ever.

Based on new information, it appears that the likelihood of the U.S. Securities and Exchange Commission agreeing to a Solana ETF in the near future has dropped substantially.

According to a report by Fox Business’s Eleanor Terrett, it appears that the Securities and Exchange Commission (SEC) has informed at least two out of the five companies submitting proposals for a Solana spot Exchange-Traded Fund (ETF), that their applications have been denied.

Solana ETF Approval Chances  are Extremely Low

As reported by Terrett, the Securities and Exchange Commission (SEC) has informed at least two out of the five potential issuers that their applications for the SOL spot ETFs under the 19b-4 filing will be denied.

According to what I’ve been informed, it seems that the Securities and Exchange Commission (SEC) is not open to considering any fresh cryptocurrency ETF proposals under the present administration. – Terrett

This new turn of events marks a significant shift from previous positive expectations. As recently as a few days ago, it was indicated that the talks regarding Solana ETFs were proceeding positively, with approval seemingly imminent.

Despite recent indications from the SEC, it appears they are still cautious about broadening crypto-based ETFs beyond Bitcoin and Ethereum, which are the only such funds currently authorized in the U.S. at this time.

Solana is one of multiple cryptocurrencies, including XRP, HBAR, and Litecoin, whose Exchange-Traded Fund (ETF) proposals are still pending consideration.

Filling out the 19b-4 form, responsible for establishing the Securities and Exchange Commission’s review timeline, is a vital part of our process. However, James Seyffart from Bloomberg Intelligence noted that some applicants have yet to reach this stage, as shown by deadlines labeled “Not Applicable.

Notably, Bitwise, Canary Capital, Grayscale, VanEck, and 21Shares have stirred attention with their respective Solana ETF proposals. Moreover, the joint submission from VanEck and 21Shares to Cboe underscores a growing institutional fascination towards the Solana infrastructure.

Regardless of the current momentum, the absence of clear regulatory guidelines persists as a significant concern in the market. It’s said that the chances of Solana ETF approval have dropped drastically, down to only 3%, over the past three months.

A Solana-based Exchange Traded Fund (ETF) is seen as a logical progression for Solana’s growth, offering more investors the opportunity to participate and boost liquidity. However, the Securities and Exchange Commission’s firm position highlights the hurdles faced in reaching this goal within the existing regulatory structure. The ongoing Solana ETF discussion symbolizes the broader tension between fostering innovation and maintaining oversight within the cryptocurrency sector, with many applications either denied or delayed without set deadlines.

Political and Regulatory Shifts Could Change Things

The Securities and Exchange Commission’s reluctance to widen approvals for crypto Exchange Traded Funds (ETFs) is a reflection of the current administration’s cautious stance on digital assets, primarily driven by Chair Gary Gensler. Yet, future political and leadership shifts may alter this situation.

The incoming president, Donald Trump, has shown support towards cryptocurrencies, which some analysts think could lead to less restrictive policies in this area. Experts propose that under the Trump administration, there might be a more welcoming regulatory climate for digital currencies, particularly with a Securities and Exchange Commission chairman like Paul Atkins who is favorable towards crypto assets.

This change could reignite optimism for Solana and other altcoin ETFs that are currently stalled.

Dan Jablonski, head of growth at news and research firm Syndica, stated that the most significant advantage of a new Trump Presidency could potentially be the long-anticipated ETF, which might materialize in either 2025 or 2026. Notably, it’s expected that the proficient VanEck team will spearhead this endeavor, with assistance from 21Shares and Canary Capital.

Speaking as a crypto investor, I’m consistently impressed by Solana’s robust ecosystem expansion, even amidst regulatory challenges. At the moment, each SOL token is trading around $239.47, marking a modest 1.37% increase in value today. The blockchain stands out for its impressive throughput and affordable transaction costs, which have drawn institutional attention to it.

As the newly appointed SEC chair prepares to take office before Gensler steps down, and as Trump’s inauguration draws near, there is a strong possibility of major regulatory changes. Such shifts could pave the way for greater acceptance of cryptocurrencies, potentially benefiting Solana and other altcoin ETFs. However, the road to approval remains unclear and filled with doubt in the meantime.

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2024-12-06 13:40