Will a Solana ETF Gain Approval in 2024?
![Will a Solana ETF Gain Approval in 2024? Photo - Will a Solana ETF Gain Approval in 2024?](https://s3.eu-central-1.amazonaws.com/gncrypto.news/3b1pHAh0w5nmZpQGmYEErdqlIh2mgHRpZDbyaN3l.jpg)
As Solana quickly gains traction due to its high performance and low fees, the crypto community is abuzz with speculation about the possibility of the U.S. Securities and Exchange Commission approving a Solana ETF.
The case for a Solana ETF includes arguments both for and against it.
Proponents believe that the SEC's previous approvals of Bitcoin and Ethereum ETFs have established important precedents that could facilitate the approval of an ETF for Solana, a highly liquid asset. Moreover, they argue that during the U.S. election campaigns, candidates will need to court the votes of cryptocurrency supporters, potentially leading to a relaxation of regulatory barriers.
This reasoning is supported by noticeable changes in political attitudes toward cryptocurrencies. For instance, Donald Trump, who was critical of cryptocurrency until 2023, has recently shown significant support for digital assets. He even launched his own NFT collection centered around his criminal charges, and his crypto wallet has received about $500,000 in donations, accumulating nearly $14.5 million.
President Joe Biden is also adjusting his stance. Despite signing an executive order in March 2022 that recognized cryptocurrencies as posing systemic risks to the nation's financial and national security, Biden appears to have shifted his view. His team is now actively consulting with leading figures in the crypto industry to gather advice on regulation and gauge the community's sentiments.
Solana is a rapidly expanding project, recognized for its vibrant community and the wide range of projects being built on its platform. This growing popularity could incentivize ETF providers to launch a Solana ETF to meet investor demand. Key figures like Cathie Wood, Anthony Scaramucci (Founder and Managing Partner at SkyBridge Capital), Geoffrey Kendrick (Head of Digital Assets at Standard Chartered Bank), and Brad Garlinghouse (Ripple) believe that the debut of a Solana ETF is imminent.
It's also noted that the CEO of Ripple has hinted at the possibility of an XRP ETF being approved in the future.
Despite the optimism, more conservative viewpoints from institutions like JPMorgan suggest caution. They argue that the SEC had insufficient grounds to deny Bitcoin and Ethereum ETFs previously, especially since the Commission had already determined a year ago that these digital assets do not qualify as securities.
However, Solana faces specific regulatory hurdles. The project is dealing with class-action lawsuits and issues related to the centralized distribution of its tokens—reportedly, the project team controls up to 48% of all SOL tokens.
Even the potential adoption of a cryptocurrency bill that clarifies the distinction between commodities and securities might not resolve these challenges. According to the bill, projects holding more than 20% of their issued assets are considered centralized and subject to SEC regulation. Furthermore, on June 5, 2023, the SEC classified SOL as a security in the Binance case, and on June 6 of the same year in the Coinbase case.
This backdrop could potentially postpone the approval of a Solana ETF indefinitely.