Altcoin
what will be the next crypto fund?
The approval of the Ethereum spot ETF has given the crypto community hope for the launch of other altcoin-based funds.
Last week, the U.S. Securities and Exchange Commission (SEC) has approved requests to open spot ETFs on Ethereum. The cryptocurrency community sees this move as an opportunity to launch funds with other major altcoins, including the Solana ETFs.
How a spot ETF works
A point ETFs is a tool through which exchange participants can invest in digital cryptocurrency without purchasing and storing it in physical form. This procedure is based on monitoring the actual market price of the asset.
After purchasing shares of a spot ETF, the investor receives a share in the fund. The fund represents a certain volume of cryptocurrencies in their real form. Fund specialists manage the portfolio.
With a place in Bitcoin ETFs, investors easily gain exposure to cryptocurrency. They do not need to purchase, hold or manage their portfolios independently, which could provide impetus for more investment in the cryptocurrency market.
Acceptance of Cryptocurrency ETFs in the United States
In late 2021, the SEC allowed the launch of Bitcoin futures ETFs for the first time. Then, in January 2024, the SEC approved the first 11 spot Bitcoin ETFs. GreyscaleThe lawsuit against the SEC was instrumental in changing the regulator’s position.
The victory of the case and the subsequent recognition of the legality of spot ETFs made it possible to reduce the distance between digital and traditional assets. Grayscale, which previously operated the Bitcoin Trust with some restrictions, now has the opportunity to transform into a full-fledged ETF.
Altcoin ETFs
The SEC has approved Forms 19b-4 for eight Ethereum-based exchange-traded funds (Grayscale, Bitwise, Black rock, VanEckARK 21 shares, Invesco, Fidelityand Franklin) in a single decision, thus marking the beginning of altcoin-based ETFs.
Following the approval of the Ethereum ETF, the crypto community is wondering whether funds based on other popular altcoins will see the green light.
Solana ETF
Solana (SOL), a rising star in the blockchain field, could also be a candidate for its spot ETF. The creation of Solana The ETF is still subject to regulatory approval. To do this, the fund issuer must demonstrate that the funds comply with all legal and regulatory standards, including investor protection and market integrity.
While the exact timing of the approval remains unclear, experts believe that Solana could soon enter the cryptocurrency spot ETF market.
What industry operators say
The CEO of the investment company BKCM, Brian Kelly, said that after the legalization of spot ETFs on Ethereum, Solana ETFs will enter the American stock market. This altcoins will become the main competitor of ETH.
But the SEC is not beating around the bush about SOL’s status as if they had ETH. Those lawsuits against COIN and Kraken and others flat out say “Solana is a security” lol. Which could easily make this a very bumpy road
—James Seyffart (@JSeyff) May 22, 2024
Bloomberg ETF analyst James Seyffart also noted that after Bitcoin and Ethereum ETFs, exchange-traded fund providers will likely turn their attention to Solana.
According to Seyffart, it will take a couple of years before the crypto derivatives market is fully overseen by the US Commodity Futures Trading Commission (CFTC). The expert underlined this approval of the bill “On innovation and financial technologies for the 21st century” (FIT21) can accelerate this process.
Based on precedent/current needs: This will happen within a few years of having a CFTC regulated futures market. But congressional and market structure bills like FIT21 could make this happen more quickly.
I think a SOL ETF would see the most demand compared to other digital assets (aside from BTC and ETH)
—James Seyffart (@JSeyff) May 22, 2024
Bitwise Investment CEO Hunter Horsley said that by the end of 2024, the cryptocurrency community will be surprised by how many financial firms will invest their capital in spot Bitcoin ETFs.
The head of Bitwise is convinced that the distribution of a new digital asset class will make the cryptocurrency market even more attractive for investors.
By the end of 2024, people will be amazed at the number of asset management firms that own a bitcoin ETF.
They are intelligent, many extremely knowledgeable, and increasingly share the belief in Bitcoin. Oh, and they’re just long.
He will be an extraordinary new voter in…
— Hunter Horsley (@HHorsley) April 20, 2024
Tristan Frizza, founder of Zeta Markets, commented to crypto.news that many consider BTC, ETH and SOL to be the three significant cryptocurrencies of this market cycle. Therefore, with the approval of the ETH ETF, SOL will likely be the next ETF candidate.
“While Bitcoin has been touted as ‘digital gold’ and Ethereum has an institutional focus, Solana is the network embraced by retail users with consistently among the highest activity metrics. Even the recent boom in protocol launches and TGE tokens on Solana has attracted a lot of attention, users and capital inflows to the network, and the anticipation of further growth will make it seem more than likely to position Solana as a top asset for consideration for the ETF.”
Tristan Frizza, founder of Zeta Markets
While nothing is clear yet, the impact of such ETF approval will likely attract attention, capital, developer and user activity, which will further increase Solana’s existing flywheel, and is what there are many supporters of the network, concluded Frizza.
crypto.news also requested comment from the Solana Foundation team regarding the likelihood of the Solana ETF being approved.
Conclusion: Will the Cryptocurrency Industry See Solana ETFs?
The SEC’s approval of spot Bitcoin ETFs has sparked interest in the potential of Solana-based ETFs, which could make investing in the SOL token more accessible to everyone.
The approval of an altcoin ETF would represent a significant milestone, potentially similar to the approval of spot ETFs on Bitcoin and Ethereum. It would promise to attract more institutional players into the cryptocurrency market.