Recently, four Solana ETFs were submitted to the BZX exchange of the Chicago Board Options Exchange (Cboe). As a practitioner closely following the dynamics of the cryptocurrency market, I am excited about this news, as it not only marks a possible breakthrough for the cryptocurrency industry but also indicates that the regulatory environment is about to undergo profound changes. Especially in the context of the conclusion of the U.S. elections, with Trump about to take office and SEC Chairman Gary Gensler planning to resign, I deeply feel that the cryptocurrency industry is standing at the crossroads of transformation.
Regulatory Model Shift: From Enforcement to Information Disclosure
Chairman Gensler's term at the SEC is known for its strict enforcement of regulations, especially in the cryptocurrency sector. However, this situation may fundamentally change after his resignation. Analysts predict that the SEC will return to a traditional regulatory approach based on 'information disclosure.' This not only provides a potential opportunity for the approval of Solana's ETF but also brings hope for the cryptocurrency market as a whole.
The Rise and Potential of Solana
In recent years, Solana's growth rate has been astonishing, with its market capitalization soaring to the fourth largest cryptocurrency in the world. Especially in November of this year, SOL's price broke its historical high, reaching $263.83, with a total market capitalization of $121.1 billion. This indicates that Solana's market potential is being recognized by a broader range of investors.
However, we cannot ignore the challenges faced by Solana's ETF application. Looking back at the approval process of Ethereum ETFs, the SEC has extremely strict conditions for the approval of spot ETFs, requiring a mature futures trading market, price stability, and market maturity. Although Solana has not yet listed futures on the Chicago Mercantile Exchange (CME), its increased decentralization and technological advancements give me confidence in its application prospects.
Support from Legal Framework: The Possibility of Commoditization Path
What impressed me is VanEck's view on the commoditization of Solana. They argue that although Solana was listed by the SEC as one of the unregistered securities, from a legal definition perspective, its decentralization and market performance are more akin to a commodity. I particularly agree with Sigel's mention of the 2018 CFTC v. My Big Coin case, which shows that even without futures contracts, crypto assets can still be considered commodities.
In addition, the decentralization progress made by Solana in the past year is particularly remarkable. The holding ratio of its top 100 holders has decreased from 30% to about 27%, and the holding ratio of the top 10 addresses is now less than 9%. This trend towards decentralization makes Solana more aligned with the definition of commodity-like assets, thereby clearing some obstacles for the ETF application.
Market Outlook and Potential Impact
If Solana's ETF is approved, it will open new investment channels for institutional investors and ordinary retail investors. I can't help but think of Alexander Blume's metaphor—launching an ETF is like replacing a swimming pool's water pipe with a large fire hose, which will inject unprecedented liquidity into the cryptocurrency market. According to data provided by Grayscale Investments, the assets managed by its Solana Trust have reached $70 million, indicating that market demand for investment in Solana is rapidly growing. If we calculate based on Solana's market capitalization being about 6% of Bitcoin's, the market demand for Solana's ETF could ultimately reach $3 billion. This will undoubtedly become a new milestone in the cryptocurrency market.
Welcoming a New Era in the Cryptocurrency Market
I believe we are witnessing a significant transformation. The application for Solana's ETF is not just a technical attempt, but an important step for the entire industry towards mainstream financial markets. Although there are still uncertainties in the future, I firmly believe that in a more open and innovation-supportive regulatory environment, the potential of the cryptocurrency market will be fully unleashed, and investors will welcome a more diversified and prosperous era.
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Statement of Work: Personal Views, For Reference Only
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