Cryptocurrency market has taken another step towards the regulation and mass investment of cryptocurrencies, as asset management company and Bitcoin ETF issuer VanEck has applied for the first Solana ETF in the United States.
Following the approval of Bitcoin exchange-traded funds (ETFs) in January and the expected launch of Ethereum ETFs in July, this development marks another milestone in expanding cryptocurrency investment options for retail and institutional investors.
The news of VanEck’s submission of the Solana ETF to the U.S. Securities and Exchange Commission (SEC) has caused the native token SOL to soar, with the price rising by nearly 8% after VanEck’s director of digital asset research, Matthew Sigel, revealed the news.
Sigel emphasized the reasons for VanEck’s application in a social media post, highlighting Solana’s potential as a competitor to Ethereum and its ability to support various applications such as payments, trading, gaming, and social features.
Describing Solana as open-source blockchain software aimed at achieving scalability, speed, and low costs, Sigel explained that the platform provides an enhanced user experience in multiple use cases.
Sigel also mentioned that Solana is capable of processing thousands of transactions per second at low costs and uses secure mechanisms based on historical proof and stake proof. These are the reasons behind the bold move to submit the Solana ETF to the SEC on Thursday.
VanEck believes that Solana’s high throughput, low costs, strong security, and vibrant community make it an attractive choice for the ETF, providing investors with an innovative open-source ecosystem.
Additionally, Sigel argued that the native token SOL is used as a means of payment for transaction fees and computing services on the Solana blockchain, similar to Bitcoin and Ethereum in their respective networks. This suggests that it should be classified as a commodity rather than a security, providing ample reason to support the approval of the Solana ETF by the SEC.
While the news of the Solana ETF application is exciting, some experts express caution. For example, Bloomberg ETF expert James Seyffart suggests that the Solana ETF may only be launched under the new government leadership in the White House and the SEC by 2025, as cryptocurrency regulation is a major issue in the White House election.
Furthermore, market analyst Adam Cochran emphasizes that the unresolved claims by the SEC and the futures trading volume requirements by the Chicago Mercantile Exchange (CME) are potential challenges for ETF approval. Cochran further stated:
However, if it is approved, the floodgates will open, and we will get ETFs for everything, which will be very bullish for the market for every coin.
Ultimately, VanEck’s submission of the Solana ETF sets an important precedent for the cryptocurrency market. If successful, it will pave the way for wider adoption and acceptance of Solana as a valuable digital commodity, providing alternative opportunities for investors, developers, and entrepreneurs.
At the time of writing, the trading price of SOL is $147, even reaching the resistance line of $150, which will hinder the token’s recovery to previous levels in the short term.
Image source: DALL-E; Chart source: TradingView.com
