Crypto ETFs are trending, with Bitcoin and Ethereum leading the way; Solana may be next. VanEck applied for the first US Solana Spot ETF, aiming to broaden the ETF landscape. The future of Solana as either a commodity or a security remains uncertain with ongoing regulatory debates.
Unless you’ve been living under a rock, you’d have heard that crypto exchange-traded funds (ETFs) are all the rage right now. First Bitcoin got its Spot ETF in the US, Hong Kong and finally on the ASX, then Ethereum approached trading a fund – which is expected to happen in early July.
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In addition, several industry insiders have predicted that it is time for other altcoins to make a turn at an ETF.
And here we are: VanEck just filed for a Spot Solana ETF. The price of SOL rose as much as 8% on the back of the news, trading just under US$148 (AU$222) at the time of writing.
Head of digital assets announces first US Solana Spot Fund
In a first for the United States, VanEck just announced the application via its head of digital asset research, Matthew Sigel. Sigel posted a lengthy statement on Platform X detailing the reasons for the listing.
He highlighted the “open source blockchain software” that Solana uses to “handle various applications including payments, commerce, gaming and social interactions”.
Additionally, Sigel pointed to Solana’s perceived superiority over other digital assets.
Operating as a single global state machine without fragmentation or layer 2s, the Solana blockchain’s unique combination of scalability, speed, and low cost can provide a better user experience for many use cases.
Matthew Siegel VanEck believes Solana is a commodity that functions in similar ways to Bitcoin and Ethereum, saying:
It is used to pay for transaction fees and computing services on the blockchain. Like ether on the Ethereum network, SOL can be traded on digital asset platforms or used in peer-to-peer transactions.
Matthew Siegel A spot ETF directly buys and holds the underlying asset it tracks, while a futures ETF invests in futures for the asset – potentially leading to different price behavior and regulatory considerations.
Verdict still out if Solana is a commodity or a security
Sigel mentioned Solana’s status as a commodity several times in his post – but that doesn’t mean regulators will agree with that view.
The chairman of the Securities and Exchange Commission (SEC), Gary Gensler, has stated in the past that “everything but Bitcoin is a security”.
So naturally, the crypto community reacted with mixed feelings to VanEck’s announcement – which received more than 1 million views – with some welcoming the move and others urging caution.
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Some even criticized the Solana distribution model, and others took issue with a lack of decentralization.
There is also the issue of a missing Futures ETF, which appears to have helped Bitcoin and possibly Ether across the finish line.
So, it remains to be seen what level of success VanEck and other potential applicants have and what role politics and the US presidential elections later this year have in all of this – we certainly shouldn’t expect a Spot Solana ETF exchange anytime soon.
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