Asset managers VanEck and 21Shares recently filed to launch Solana ETFs, making them the first to seek approval for this type of investment tied to the popular cryptocurrency. The timing of this move is crucial, as the approval process for these ETFs could coincide with the potential return of Donald Trump to the U.S. presidency. With Trump’s recent positive stance on cryptocurrencies, there is a higher likelihood that Solana ETFs could be approved under his administration.
Up to date, only Bitcoin ETFs have been approved in the U.S., and Ethereum ETFs are still pending final approval. However, Solana is seen as a natural progression for ETF investments, given its standing as one of the largest cryptocurrencies in the market. The major hindrance to the approval of Solana ETFs lies in the absence of a well-established regulated derivatives market for Solana, a criterion set by the current Securities and Exchange Commission (SEC) under President Joe Biden’s administration.
The filing of Solana ETF applications by VanEck and 21Shares seems to be a strategic bet on the outcome of the upcoming November presidential election. With predictions favoring a potential return of Trump to the White House, it is speculated that a new administration may prioritize crypto-friendly policies and push for the approval of Solana ETFs. VanEck’s move indicates a calculated risk based on the expectation of a shift in regulatory stance towards cryptocurrencies under a Trump administration.
The SEC’s response to the filings for Solana ETFs is contingent upon the submission of a 19b-4 form, which mandates a response within 240 days. If the form is filed promptly, the deadline for approval could extend into February 2025, potentially overlapping with a new Trump administration. The current reluctance of the SEC under Biden to approve crypto-related products suggests that the filings by VanEck and 21Shares are strategic maneuvers to align with a possible future shift in regulatory attitudes towards cryptocurrencies.
Analysts believe that the approval of Solana ETFs hinges on the establishment of a clear regulatory framework for cryptocurrencies, defining them as either securities or commodities. Additionally, the SEC would need assurance of surveillance sharing agreements with unregulated crypto exchanges before approving the ETFs. The current administration’s stance on crypto regulations may impede the approval process, prompting asset managers to place their bets on a more favorable regulatory environment under a potential Trump presidency.
VanEck has refrained from commenting on whether its filing for a Solana ETF was a strategic move in anticipation of a Trump victory. However, industry experts suggest that the timing of the applications for Solana ETFs reflects a calculated risk based on the expectation of a shift towards a more crypto-friendly regulatory landscape under a different administration. As the approval process unfolds, the outcome will likely be influenced by the political climate and regulatory priorities in the U.S.
