At about nine o'clock last night (27th), asset management giant VanEck confirmed that it had submitted an application document for the Solana Fund (VanEck Solana Trust) to the U.S. Securities and Exchange Commission (SEC). The fund is expected to issue equity common shares and plans to be listed on the Cboe BZX exchange. The specific issuance date has not yet been determined.
In response, Matthew Sigel, head of digital asset research at VanEck, posted a message on his social media account explaining the application. The following is a translation of his remarks:
I’m happy to announce that VanEck has just filed for the first Solana exchange-traded fund (ETF) in the U.S. Here are some of our thoughts on SOL as a commodity.
Why do we apply for Solana ETF?
An Ethereum competitor, Solana is an open-source blockchain software designed to handle a variety of applications, including payments, transactions, gaming, and social interactions. The Solana blockchain is known for its unique scalability, speed, and low cost, which may provide a better user experience for a variety of use cases.
By processing thousands of transactions per second and using advanced security mechanisms that combine proof of history and proof of stake, Solana excels in decentralization, high throughput, low costs, and strong community support. This makes Solana an attractive ETF option, providing investors with exposure to a versatile and innovative open source ecosystem.
Why do we think SOL is similar to commodities like Bitcoin, Ethereum, etc.?
We think of Solana's native token, SOL, as being similar to other digital commodities like Bitcoin (#Bitcoin) and Ethereum (#ETH). It is used to pay for transaction fees and computing services on the blockchain. Similar to Ether on the Ethereum network, SOL can be traded on digital asset platforms or used for peer-to-peer transactions.
The wide range of applications and services supported by the Solana ecosystem, from decentralized finance (DeFi) to non-fungible tokens (NFTs), demonstrates the practicality and value of SOL as a digital commodity. The Solana network is maintained by multiple independent validators around the world to ensure that the infrastructure for transaction verification and record keeping is not controlled by a single entity.
SOL's decentralized nature, high utility, and economic viability are similar to other established digital commodities, reinforcing our confidence in SOL as a valuable commodity. It offers multiple use cases for investors, developers, and entrepreneurs seeking an alternative to the duopoly app store.
No pledge will be made
In addition, the SEC's application documents state that the trust, the sponsor, the SOL custodian, or any other person associated with the trust will not directly or indirectly pledge any of the trust's SOL to earn rewards or other benefits. Currently, the trust only subscribes and redeems through cash. (That is, no staking activities are involved)
If there is a new White House and SEC in 2025, the likelihood of going public increases
Regarding VanEck’s application, Bloomberg analyst James Seyffart said:
Now that the first SOL ETF has been filed in the U.S., it will be interesting to see whether other issuers will follow suit.
The initial thinking is that we may have to wait for a new government and SEC to come to market in order to see such an ETF in 2025. However, this is not guaranteed.
Meanwhile, Evgeny Gaevoy, founder of cryptocurrency market maker Wintermute, also expressed his opinion:
He believes that the chances of a SOL ETF being approved this year are almost zero, and he noted that the idea that the Trump administration would prioritize this issue is pretty stupid.
Gaevoy said that once you look at the inflows into Ethereum ETFs this year, you can understand that SOL's inflows may be even smaller.
SOL price breaks through $150
Inspired by this news, the price of SOL rose by 8% last night, breaking through the $150 mark. As of the time of submission, it fell slightly and was quoted at $147.79.
Three Reasons the SOL ETF Faces Long-Term Challenges
Although I also hope to see more and more traditional financial products enter the crypto market, I think the possibility of Solana ETF being approved in the short term is low. At least the following issues need to be resolved:
1. Insufficient decentralization
Solana is known for its high speed and low cost, but these advantages sacrifice decentralization to a certain extent. Currently, running Solana nodes usually requires expensive hardware equipment support, which leads to high operating costs, which is why it is called the "computer room chain".
In addition, some institutions hold a large amount of Solana. For example, in the FTX explosion incident, a large amount of Solana held caused its price to fall sharply. These factors may cause Solana to be considered not decentralized enough, and thus face the risk of being characterized as a security.
SEC Regulatory Issues
Bitcoin and Ethereum have a strong position in the cryptocurrency market, mainly because they have been gradually established through Proof of Work (PoW) used by miners around the world.
If the SEC approves the Solana ETF, it could open the door for thousands of other similar public chain applications to be rejected. This could lead to a flood of cryptocurrency ETFs in the market, and whether regulators can handle this pressure is also a major question. Therefore, it may take years to plan and prepare before regulators such as the SEC come up with a viable solution.
3. Lack of SOL futures ETF
According to historical data and the way the market operates, it is usually necessary to have a futures ETF before applying for a spot ETF, which is confirmed by the cases of Bitcoin and Ethereum. Rob Marrocco, vice president of ETF listing at Cboe, once said that without the establishment of a futures market or changes in regulatory conditions, it would be difficult for other cryptocurrencies such as Solana to obtain ETF approval.
Even if Solana launches a futures ETF, it will take some time to establish sufficient trading records to prove that it has sufficient liquidity and transparency. This process may take quite a long time.
In summary, the author believes that the Solana ETF is unlikely to be approved in the short term. VanEck's move may be more to attract attention and publicity. Therefore, we need to continue to pay attention to subsequent developments.
