VanEck has submitted a filing to the U.S. Securities and Exchange Commission (SEC) for an exchange-traded fund (ETF) centered around Solana (SOL).
This ETF aims to track the price of Solana, an open-source blockchain network known for its scalability and low transaction fees. VanEck’s head of digital assets research, Matthew Sigel, announced the filing on X, expressing excitement about launching the first Solana ETF in the United States.
I am excited to announce that VanEck just filed for the FIRST Solana exchange-traded fund (ETF) in the US. Some thoughts on why we believe SOL is a commodity are below.Why did we file for it?A competitor to Ethereum, Solana is open-source blockchain software designed to… pic.twitter.com/XwwPy8BXV2
— matthew sigel, recovering CFA (@matthew_sigel) June 27, 2024
Sigel elaborated on the rationale behind the filing, highlighting Solana’s advanced technology and unique combination of proof-of-history and proof-of-stake mechanisms. These features enable the blockchain to process thousands of transactions per second with minimal fees, making it a compelling option for various applications such as payments, trading, gaming, and social interactions. VanEck believes the ETF will expose investors to a versatile and innovative blockchain ecosystem.
Debate Over SOL’s Classification
An aspect of VanEck’s filing is the assertion that SOL should be classified as a commodity. Sigel stated that SOL functions similarly to other digital commodities like Bitcoin and Ethereum, which are used to pay transaction fees and computational services on the Solana network. The claim that SOL is a commodity contrasts with the SEC’s previous stance, where the agency classified SOL as a security in an enforcement action against Binance.
The classification of cryptocurrencies has been a contentious issue, with ongoing debates about whether certain digital assets fall under the jurisdiction of the SEC or the Commodity Futures Trading Commission (CFTC). VanEck’s position is based on SOL’s decentralized nature, high utility, and economic feasibility, which align with other established digital commodities. The firm believes these attributes reinforce SOL’s value as a commodity suitable for inclusion in an ETF.
Market Reaction and Future Prospects
After the announcement, Solana’s price increased, gaining 7.86% shortly after the news broke, according to CoinMarketCap data. The price surged to $147, reflecting renewed investor interest and confidence in the altcoin. Market analysts have mixed opinions on Solana’s future trajectory. Some predict a potential decline due to opportunistic profit-taking, while others foresee a continued upward trend, possibly reaching $200.
Moreover, technical and on-chain analyst Ali Martinez had previously indicated a positive outlook for Solana. In a tweet, Martinez mentioned that TD Sequential, a technical analysis tool, presented buy signals on Solana’s daily charts, suggesting an anticipated price rebound.
What did we say about #Solana? https://t.co/iNP3e5wltk pic.twitter.com/beCs28hKL6
— Ali (@ali_charts) June 27, 2024
The VanEck Solana Trust aims to list on the Cboe BZX Exchange, Inc., with its shares valued daily based on the MarketVector Solana Benchmark Rate, according to the firm’s S-1 registration statement. While the SEC has recently approved spot ETFs for Bitcoin and Ethereum, the approval process for the Solana ETF remains pending.
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