VanEck and 21Shares have yet to receive approval from the SEC for the Solana ETF, which has slowed the decision-making process. Eric Balchunas, the Senior ETF Analyst at Bloomberg, believes that the SEC will decide on the Solana ETFs by mid-March 2025. The outcome of the November presidential election may play a significant role in the SEC’s choice.
Biden Stance May Doom Solana ETFs
Joe Biden and Donald Trump are the two leading candidates for the upcoming presidential election. The current administration under Biden has been quite harsh on the crypto industry, as witnessed by the enforcement actions spearheaded by the SEC chair Gary Gensler against leading crypto exchanges such as Binance and Coinbase.
On the other hand, Trump has endorsed cryptocurrencies and blockchain companies in his campaign. If Trump wins, crypto enthusiasts believe he may appoint the CLO at Robinhood, Dan Gallagher, as the new SEC Chair. This change could create a more favorable environment for crypto-related products, including Solana ETFs.
According to Balchunas, in the event of Biden’s victory, the future of Solana ETFs could be bleak. He thinks they would be ‘dead on arrival.’ It is based on Biden’s current stance on how he plans to regulate the cryptocurrency industry.
VanEck, 21Shares Eye Spot Solana ETFs
VanEck and 21Shares have submitted applications to the SEC for listing spot Solana ETFs. Chicago Board Options Exchange has recently filed applications to list these proposed ETFs. This is a positive development in the approval of Solana ETFs.
The Cboe noted that Solana ETFs are similar to spot Bitcoin and Ethereum ETFs previously approved by the SEC. They highlighted Solana’s decentralization, throughput, and speed, which, they claimed, cannot be easily manipulated. The Cboe noted, “Like Bitcoin and ETH, the Exchange believes that SOL is not prone to price manipulation.”
However, the SEC has not taken cognizance of these filings. ETF analyst Nate Geraci noted that the decision clock will begin ticking once the US SEC receives the filings. SEC rules indicate that upon receipt of the filings, they are given 240 days to accept or reject them.
Election Results to Influence Crypto Regulations
Solana is known for having one of the most sophisticated blockchain technologies in the market. Its capabilities are similar to those of some of the most popular cryptocurrencies, such as Bitcoin and Ethereum. Both VanEck and 21Shares emphasized these areas in their filings to support the approval of their ETFs.
However, regulating these technologies still presents challenges. The SEC’s acknowledgment is essential to initiating the formal analysis process. For now, the market expects a significant policy change.
According to Balchunas, the election’s outcome will significantly affect the position of the SEC. Biden’s win could lead to the tightening of laws and create a less favorable climate for crypto offerings. On the other hand, a Trump victory could result in a more favorable regulatory environment.
Looks like Solana ETFs are going to have a final deadline of mid-March 2025. But between now and then the most imp date is in November. If Biden wins, these likely DOA. If Trump wins, anything poss. https://t.co/ywkf6oA8Rc
— Eric Balchunas (@EricBalchunas) July 8, 2024
It has created a lot of ambiguity in the market due to the unknowns of cryptocurrency regulations. The decision on Solana ETFs is also expected to be made soon and will significantly interest many investors. The result could also have implications for other cryptocurrency-based financial instruments.
