Grayscale’s ETF Gamble: A Russian Doll of Regulatory Hurdles 🤷‍♂️

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In a move as bold as a butterfly alighting on a bull market, Grayscale has fluttered its regulatory wings and submitted a registration statement to metamorphose its Solana Trust into an ETF listed on NYSE Arca.

But lo! The prediction markets, as fickle as the Russian winter, remain frosty towards the prospects of approval.

Will the Solana ETF Remain a Cold Case for Q2?

On Polymarket, the likelihood of a Solana ETF approval is as slim as a 23% slice of borscht. Broader expectations for any 2025 approval have shriveled from a robust 92% to a mere 83%.

This frosty reception is the result of regulatory delays, which have stretched like the longest of Tolstoyan novels. In March, the SEC decided to take a leisurely stroll through the review timelines for several ETF applications, including those tied to Solana and other altcoins.

This strategic procrastination suggests the SEC is waiting for a permanent chair as eagerly as a debutante awaits her first ball. Mark Uyeda, the interim chair, has shown all the decisiveness of a pawn on a chessboard.

Paul Atkins, Trump’s nominee, paraded before the Senate like a bear at a circus. Lawmakers grilled him like a shashlik, casting a shadow of uncertainty over future approvals.

In a tactical retreat, Grayscale’s latest filing has abandoned staking, perhaps hoping to sprint through the review process. The SEC has previously taken umbrage at staking in ETF proposals, much like a babushka at a punk rock concert.

Last year, when spot Ethereum ETFs took a tentative step forward, Grayscale, Fidelity, and Ark Invest/21Shares all stripped out staking components like a Russian doll losing its layers.

Under Gary Gensler’s reign, the SEC fretted over proof-of-stake protocols as if they were the next great Soviet threat. Asset managers, ever the chameleons, adjusted their applications to blend with the SEC’s whims.

With approvals for spot Bitcoin and Ethereum ETFs in the bag, several firms are now eyeing an expansion as ambitious as the Soviet space program. They aim to offer access to other cryptocurrencies through traditional brokerage accounts, without the hassle of direct asset custody.

Solana, as resilient as a Russian matryoshka, remains a strong contender, buoyed by its growing futures market and a regulatory environment that’s slightly less daunting than a Siberian winter.

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2025-04-04 20:12