The recent success of spot Bitcoin ETFs in the U.S., which brought in $1.8 billion in inflows last week, along with the approval of spot Ethereum ETFs, has cleared the way for altcoin ETFs in the United States.
Industry experts are now predicting that an altcoin ETF may be approved next in the U.S. However, Bloomberg Research ETF Analyst James Seyffart told Cryptonews that there is a long way to go before another digital asset gets an ETF in the U.S.
"Seyffart further mentioned that he believes Solana (SOL) makes the most sense as the next possible ETF, yet he noted that the SEC is actively calling SOL a security."
"We’ve seen the SEC pivot, but it would likely be years before we see an altcoin ETF," Seyffart said. "Even if an issuer filed for an ETF tomorrow, it wouldn’t be up for a decision from the SEC until March 2025."
"Seyffart added that he believes that an altcoin ETF will have almost 'no shot of approval' in the next year due to the requirements needed for an ETF to be considered in the U.S."
"You need two things for an ETF. First, clarity around whether an asset is a commodity or security," Seyffart said. "Second, a regulated market that can be surveilled."
"Seyffart pointed out that the Chicago Mercantile Exchange (CME) futures market is federally regulated by the Commodity Futures Trading Commission (CFTC). In the U.S., the CME controls both Bitcoin (BTC) and Ethereum (ETH)."
"‘There currently isn’t a federally regulated or surveilled market that would satisfy the SEC requirements on any other digital assets at this time,’ he said. ‘This can change if an admin is open and constructive with the industry, but it is still likely to take years.’"
"Michael Repetny, a core contributor at Marinade – a liquid staking protocol on Solana – added that before a spot ETF for Solana is approved, there must be a future ETF on the CME."
"‘This would indicate progressive steps toward full acceptance,’ Repetny remarked."
"Although a futures-based Solana ETF isn’t currently available to trade on any U.S. market, there are ETF-like products investors can buy."
"For example, the Grayscale Solana Trust (GSOL) is a closed-end fund. There is also VanEck Solana, which is an exchange-traded note (ETN)."
"‘The upcoming election could definitely have an impact on the chances for another crypto ETF, but there’s no way to know for certain,’ Seyffart said. ‘Theoretically, a pro-crypto administration would work faster on creating a framework for other digital assets to become ETFs.’"