Institutional clients, US election? Who is behind the Solana spot ETF?

On June 28, Beijing time, VanEck launched the VanEck Solana Trust and submitted a Solana spot ETF application to the SEC.

What’s interesting is that SOL, which applied for a spot ETF this time, has never had its futures ETF approved and launched for online trading before. Is the release of the Solana spot ETF submission news just a hype?

No futures ETF has been launched and is considered a security

VanEck, which submitted the Solana spot ETF to the U.S. SEC this time, is one of the issuers of BTC and ETH spot ETFs previously approved in the United States. Summarizing VanEck’s head of digital asset research’s speech on

According to the application documents, VanEck Solana Trust is expected to be listed and traded on Cboe BZX Exchange Co., Ltd., details are subject to an issuance notice.

An interesting thing is that VanEck did not follow the routine this time and directly applied for spot ETF without applying for SOL futures, which may affect the SEC’s approval process. It can also be seen from this point that there is still a lot of uncertainty in the approval of Solana spot ETF. Another uncertainty is that the SEC has made it clear in the lawsuit that SOL is an unregistered security.

Other factors that will affect the SEC's judgment on Solana's spot is its lack of decentralization. Solana's decentralization is not as good as Bitcoin and Ethereum, especially since FTX previously held a large amount of Solana. Moreover, the gap between its market value currency and Bitcoin and Ethereum is still very large, which also indicates its poor liquidity.

So it seems that this time VanEck filed Solana’s spot ETF with the SEC, is it just a hype? This is not the case.

Institutional users strongly support that the US election may reverse the situation

First of all, Solana, as the dark horse of this bull market, has attracted much attention and is highly favored by Wall Street capital. Some analysts pointed out that Solana’s high throughput, low transaction fees and security make it a potential target for ETFs.

And why Solana and not other coins? Previously, LTC, BCH and DOGE were all seen as strong candidates to hit the next wave of spot ETFs. The reason is simple. Generally, a virtual currency spot ETF must go through such a process before being approved: the U.S. CFTC regulatory agency will first list the currency futures, then the futures ETF, and finally the spot ETF.

Currently, after the CFTC submission materials are passed, in addition to BTC and ETH, the compliant futures are LTC, BCH and DOGE. However, the actual trading of these three currencies is not on CME, but on the derivatives exchange under Coinbase. . The above three tokens have not been recognized as securities by the US SEC, so the industry feels that it may be the turn of the spot ETFs for these three coins to pass.

However, we seem to only pay attention to the compliance of the process, but do not realize the important role that capital plays in spot ETFs.

Robbie Mitchnick, head of BlackRock’s digital assets, has made it clear that the needs of institutional customers determine BlackRock’s promotion of cryptocurrency products. In other words, only when institutional customers favor a certain token will these fund companies vigorously Promote this coin’s spot ETF.

We analyzed the cryptocurrency-related ETNs (index-linked securities) issued by Vaneck and found that Solana ETN is the ETN with the largest user demand (asset management scale) after Bitcoin and Ethereum. So it’s easy to understand why other fund companies, including Vaneck, will vigorously promote Solana’s spot ETFs instead of tokens that appear to be more correct in terms of process. fenyePossibility of Solana spot ETF approval

Although there is uncertainty about the launch of Solana spot ETF, changes in U.S. government leadership, especially the SEC’s pro-cryptocurrency leadership, may bring opportunities for its approval . The US election has had a real impact on the crypto market.

The price impact after the adoption of Solana spot ETF

GSR released a report evaluating the SOL price changes after the adoption of Solana spot ETF:

• Bear market: capital inflows accounted for 2% of Bitcoin inflows, SOL prices may grow 1.4 times.
• Benchmark: With capital inflows accounting for 5% of Bitcoin inflows, SOL price could increase 3.4x.
• Ideal: With capital inflows accounting for 14% of Bitcoin inflows, SOL price could increase 8.9x.

Outlook

Next year, if the SEC changes to new leadership, the likelihood of a Solana spot ETF launch may increase. However, everything is still unknown.

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