Since the success of spot bitcoin ETFs, some investors are hoping Solana could be next. However, there is no regulated futures market in Solana and there is little investor demand. Here’s what investors really want from ETFs.
Spot bitcoin and ethereum exchange-traded funds have been a resounding success — and fueled speculation about which cryptocurrency will be packaged and sold as an ETF next.
For some, Solana, the world’s fifth largest cryptocurrency, is a strong contender for the next ETF product. VanEck and 21Shares have applied for permission to launch such funds.
But the Solana ETF is a “non-starter,” says Sui Chung, CEO of CF Benchmarks, an index provider owned by Kraken. News.
CF Benchmarks supplies its Bitcoin Reference Rate to six of the 11 approved US Bitcoin ETF issuers and three approved in Hong Kong.
“Solana ETFs won’t happen — or at least, it won’t happen on the same basis as Bitcoin and Ether did,” Chung said.
That’s because there are no large, regulated Solana futures markets, Chung said.
The Securities and Exchange Commission, which regulates ETFs, They say Spot crypto ETFs cannot be traded on US exchanges unless there is a highly correlated, regulated futures market for the related asset.
CME, the world’s largest derivatives market, has listed Bitcoin and Ether futures from 2017 and 2021 respectively.
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“And there is no disorder in those contracts,” Chung said.
“When you have futures that trade without market disorder, there’s no reason not to have spot ETFs.”
In case of SOL ETFs
Solana proponents such as Joe McCann, CEO of crypto investment firm Asymmetric Finance, said: News SOL must be sidelined for ETF treatment depending on its stature in the market.
SOL is up more than 45% year-to-date – doing better than Bitcoin or Ether – thanks in part to retail traders speculating on memecoins and lower transaction fees.
Investment giant VanEck became the first firm to offer the SOL ETF in late June.
But other skeptics echo Chung’s pessimism.
said Katalin Tischhauser, Head of Investment Research at Signum Bank News Solana ETFs are in low demand among traditional investors.
To be sure, the meltdown on Capitol Hill toward the crypto industry paves the way for the Solana ETF. After all, that’s one of the reasons Ethereum ETFs were launched, according to Bloomberg Intelligence analyst Eric Balchunas.
But that depends on the results of the US elections. In JulyBalchunas said Solana’s ETF applications “will likely die on arrival” if the Democrats win. Anything if Trump wins [is] possible.”
What’s next?
If not the Solana ETF, what’s next? Instead, Chung said, consumers want to “fire and forget” products that expose the market to crypto.
“This is the most interesting trend happening on the ETF front,” he said.
He suggested Franklin Templeton A recent proposal An example of this trend is to launch a new crypto-focused ETF.
The asset manager, one of the first to offer crypto-focused products to investors, has proposed a fund with the ticker EZPZ that offers investors the CF Benchmarks Institutional Digital Asset Index.
The firm said in its SEC filing that the ETF will initially consist of Bitcoin and Ethereum Filing.
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Related Topics SolanaCrypto ETF