Is the Solana ETF about to launch? VanEck submits its first application, will it be approved this year?

As the time for the adoption of the ETH ETF approaches, the market begins to focus on the next cryptocurrency that may launch an ETF. On the evening of June 27, asset management giant VanEck submitted the first application for Solana spot ETF to the U.S. Securities and Exchange Commission (SEC). This move caused the price of SOL to surge by nearly 10% and became the focus of market attention.

So, is it possible that the Solana ETF will launch this year? what does that mean?

VanEck applies to SEC for Solana ETF

According to foreign media reports on June 27, asset management giant VanEck has applied to the U.S. Securities and Exchange Commission (SEC) to list the first U.S. exchange linked to the spot price of the crypto token Solana. Exchange-traded fund (ETF), the company is also one of the first issuers of Bitcoin spot ETFs in the United States.

Matthew Sigel, head of digital asset research at VanEck, revealed that the new ETF is called VanEck Solana Trust and aims to take advantage of Solana’s decentralized nature, high practicality and economic feasibility.

The investment objective of the VanEck Solana Trust is to reflect the price performance of the Solana cryptocurrency, excluding trust operating expenses. The trust will value its shares daily using the MarketVector Solana benchmark interest rate index, according to VanEck's SEC filing. The index is calculated based on prices offered by what MarketVector considers to be the top five SOL trading platforms, as determined by the industry-leading CCData Centralized Exchange Benchmark Review Report.

Additionally, the filing states that VanEck Solana Trust is expected to be listed on the Cboe BZX exchange if approved by the SEC.

Notably, VanEck said SOL should be considered a commodity, despite the SEC naming SOL an unregistered security in its lawsuit against Coinbase and Binance last summer.

Sigel said, “We believe that the function of the native token SOL is similar to other digital commodities such as Bitcoin and Ethereum. It is used to pay for transaction fees and computing services on the blockchain. Just like Ethereum on the Ethereum network , SOL can be traded on digital asset platforms or used for peer-to-peer transactions."

Sigel added that VanEck applied for the Solana ETF because the blockchain is a competitor to Ethereum with "scalability, speed and low cost. A unique combination." “SOL’s decentralized nature, high utility, and economic viability are consistent with characteristics of other mature digital commodities, reinforcing our belief that SOL may be a valuable commodity for duopoly-seeking applications. Investors, Builders and Entrepreneurs of Store Alternatives Provide Use Cases"

Will the Solana ETF be approved this year?

In January this year, the SEC announced the approval of 11 Bitcoin spot ETFs as expected by the market. After that, the market quickly launched a spot ETF for the second largest cryptocurrency Ethereum (ETH).

Currently, the 19b-4 document for the Ethereum spot ETF has been approved, and the issuer only needs to wait for the S-1 document to be approved before the Ethereum ETF can be officially listed. According to Gary Gensler, the document may be approved "sometime this summer."

After the Solana ETF application was submitted, the market was full of curiosity as to when the ETF would be approved.

According to data from the Polymarket website, the current market believes that the Solana ETF may have a 13% chance of passing in 2024. The vast majority of people have a negative attitude towards this.

Bloomberg analyst James Seyffart said, "The current preliminary thinking is that if we have a new government and Securities and Exchange Commission in 2025, this ETF will be possible to launch. Even then, there is no guarantee."

Because currently, the biggest obstacle to the approval of Solana spot ETF is legal issues. A year ago, the SEC positioned the cryptocurrency as an unregistered security. In addition, SOL does not have a futures market, while Ethereum and Bitcoin already had mature futures products before the launch of spot ETFs, which are more capable of complying with regulatory requirements.

Evgeny Gaevoy, founder of cryptocurrency market maker Wintermute, also believes that the possibility of SOL ETF being approved this year is almost zero. Additionally, given the inflows into the Ethereum ETF this year, SOL will likely see even less inflows.

However, market maker GSR believes that Solana is one of the few crypto assets with strong market demand and a highly decentralized network. These attributes are expected to guide potential ETF issuers' willingness to seek listing.

GSR said the price of Bitcoin more than doubled in the months leading up to and following the launch of the spot ETF. If SOL's inflows were only 5% of BTC's, its price could more than triple. GSR considers the inflow rate to be a "base case," as Solana investment products accounted for 5% of Bitcoin inflows from 2021 to the end of 2023, before the crypto ETF craze broke out.

Also, given Solana’s smaller size, its potential for price action is much greater.

Extended reading:

What is the future of SOL coin? The latest Solana (SOL) coin price trend prediction in 2024

The price of SOL coin has soared, exceeding $150

Since the news of VanEck’s submission of SOL ETF application came out, the price of Solana token has increased by nearly 8%, and once exceeded $150.

However, the price of SOL currency has fallen back.

As of June 28, Taiwan time, SOL was trading at $45.23, up 6.98% in the past 24 hours, reaching a maximum of $150.77.

As the currency price rises, SOL’s market value reaches $67,213,026,409, ranking 5th among all cryptocurrencies. Additionally, its trading volume in the past 24 hours was $3,160,798,251, with a circulating supply of 462,349,965 SOL.

The following is the Solana (SOL) price chart:

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