Galaxy Digital Predicts SEC Approval Odds for Solana ETFs
Galaxy Digital Head of Research Alex Thorn analyzed VanEck and 21Shares' spot Solana ETP filings. On June 28, the US Securities and Exchange Commission (SEC) received these aggressive filings to incorporate Solana into regulated financial markets like Bitcoin and Ethereum.
In their S-1 filing, VanEck proposes launching a commodity-based trust to directly own Solana, enabling the ETP to closely monitor its market price. Some crypto ETPs stake assets, but not this one.
The news boosted SOL's stock by 8%. The filing lacks operational mechanisms like custodian, cash custodian, and permitted participants because to its early stage. As the product nears acceptance, these issues are addressed in subsequent modifications.
Why Spot Solana ETF Odds Are Low
According to the latest updates, VanEck has not submitted the 19b-4 form, which begins the SEC's official probe. Once started, a review may last up to 240 days, according to Bloomberg analyst James Seyffart. Thus, assuming VanEck files quickly, the decision may come around March 15, 2025. This procedure includes regulatory hurdles and public comment periods typical of new financial product approval.
The SEC considers Solana an unregistered security because to pending lawsuit against Coinbase. This categorization hampers Solana-based ETP clearance. Since the Securities & Exchange Commission is charging in its complaint against Coinbase that Solana is an unregistered securities, Thorn believes this application will be denied until the SEC changes its position.
Historically, the SEC has been wary about crypto ETPs. Approval often begins with regulated futures markets, then ETPs based on them, and finally US-based spot ETPs. Bitcoin and Ethereum ETPs have struggled and succeeded on this route.
Importantly, the SEC previously rejected Bitcoin ETPs due to market size and monitoring concerns. The DC Circuit Court of Appeals opinion in August 2023 supporting futures market monitoring was the tipping moment.
