After Bitcoin and Ethereum’s Exchange Traded Fund (ETF) applications, Solana appears to be the next candidate in the United States. The fifth-largest cryptocurrency by market capitalization is performing admirably in the market overall, but it has had its fair share of challenges in the last few months.
Rumors of an impending Solana ETF are increasingly making rounds. Among these rumors is a claim that BlackRock is interested in pursuing a spot Solana ETF.
Time for a Solana ETF?
Rumors regarding a Solana ETF have been going around in the crypto market for the last few weeks after the preliminary approval of the first Ethereum ETFs in the USA. Surprisingly, the largest economy in the world allowed this move despite federal regulators having fundamental problems with the network. They did ensure certain regressive measures regarding ETFs, including a lack of staking option, which will hurt these exchange funds, but they are here nonetheless.
Investors haven’t been as keen on them as on Bitcoin ETFs, which have raised record capital in the last three and a half months of approval. But for the funds launching these ETFs, it is all about long-term acceptance within the investment community, and ETH has risen in response to this move.
Why a Solana ETF Application is Complicated?
When it comes to Solana, the move is a lot more complicated. Bitcoin and Ethereum have been the mainstays of the digital currency revolution for the better part of the last seven years. No other cryptocurrency has come close to challenging their domination, apart from a brief challenge from Ripple’s XRP in late 2017. Both of these networks are synonymous with the success of the digital currency space, which has shown in their performance.
On the other hand, Solana is hardly four years old and was one of the biggest success stories to emerge from the 2020-2021 bull market. The programmable digital currency suffered a major price tank after the 2021 bull market and lost 96% of its value. However, it has recovered most of its value since then and seems poised to have a big bull run during the highly anticipated 2024-2025 bullish phase.
Solana ETF Approval to Start an Avalanche of Crypto ETFs
If a Solana ETF is approved, it would open a cascade of similar requests from smaller crypto projects, which could make the job much more challenging for the US Securities and Exchange Commission (SEC). According to Bloomberg crypto analyst Eric Balchunas, a spot Solana ETF is likely to be delayed until the US elections in November, and if favorable candidates win, it would be a much more favorable situation for such a launch.
