ETF spots Solana boost
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VanEck filed the first application to launch a spot solana fund in the U.S. yesterday, right before the anticipated trading debuts of ether funds next week.
Why it matters: This would test a new regulatory boundary in the nascent crypto ETF market: whether the SEC would approve a product for a token with no regulated futures market.
Between the lines: The SEC kept bitcoin out of an ETF for several years, arguing that there wasn't a futures market of "significant size" related to the spot market — a key factor, it said, in mitigating the potential for fraud and manipulation through surveillance sharing agreements.
- Folks wondered if that would be an argument the agency used to deny ether ETFs before they were green-lighted.
- Unlike bitcoin and ether, however, Solana's native token, SOL, doesn't have a regulated futures market at all, and that is widely known by the investment community (or should be).
That might be why folks in TradFi and in crypto who might be bullish on SOL, in general, aren't bullish on an ETF.
- (That didn't stop speculators from bidding up the token yesterday, though prices have come down a bit since.)
Zoom out: The "will they or won't they" question on a solana ETF becomes almost moot, however, when you consider the diminishing financial- and attention-based returns expected on any crypto ETF launch after bitcoin as they slide down the market-cap ladder.
- Galaxy Research's Charles Yu expects demand for ether ETFs to get 33% of bitcoin ETF's overall flows through June 15.
- That implies $1 billion in monthly inflows for the first five months.
- Bitcoin's market cap is $1.2 trillion. Ether's is $410 billion, while solana is six times smaller, at $66 billion.
What we're watching: Solana's native token has also been labeled as a security in the SEC's cases against Binance, Coinbase and Kraken, which remain open. (Though that hasn't stopped ether from getting an ETF).
The other side: For VanEck, its filing puts it in pole position for a launch if a solana ETF were approved. In the meantime, it puts the spotlight on the firm... before the trading launch of its own ether ETF.
- 🤩 Smart timing, as it will compete with seven other issuers over a much smaller pool of potential assets than bitcoin.
💭 Our thought bubble: Down the ladder of altcoins— it's SOL, XRP, TON, and DOGE.
- So if you're going to ask for SOL ☀️, might as well ask for a DOGE 🐕 too.
