On Monday, Bitwise Asset Management added to the list of issuers on the Solana ETF race for approval.
The firm officially declared its plans to file an S-1 application for a spot Solana (SOL) Exchange-Traded Fund (ETF).
According to sources, a major international exchange like the CBOE is anticipated to lodge 19b4 filings on behalf of potential issuers soon.
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Bitwise now joins organizations like VanEck, 21Shares, and Canary Funds that have filed S-1 earlier.
Gensler’s Exit Sparks Optimism for Crypto ETFs
The surge of application of ETFs is partial to the disclosure of SEC Chair Gensler’s intention to step down from the position effective January 20, 2025, as earlier reported.
During Genlser’s period, substantial actions have been taken against the risks posed by cryptocurrencies through legal measures.
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During his tenure, the SEC engaged in aggressive enforcement actions. While some believe his absence signifies the very beginning of the change, many others hold the opinion that the coming administration is likely to be pro-crypto.
Some of the concerns that Gensler has brought forward when it comes to crypto ETFs have been conservative.
Previous initiatives to list Solana ETFs were pulled back over insiders’ expectation that the SEC under his reign was not willing to authorize such products.
SEC staff has recently resumed meetings with ETF issuers, and Gensler will soon depart. This sparks enthusiasm that the regulatory environment is likely to improve and pave the way for approvals sometime in 2025.
A New Path to Solana ETF Approval
To have a functional Solana ETF, the following are important procedures that need to be followed to receive approval.
Exchange must file the 19b4 notification with the SEC once an issuer has filed an S-1 application for listing of the ETF.
When the SEC acknowledges the receipt of the 19b4 filing, the commission has 240 days to go through the application and make its decision.
Although it does not necessarily lead to approval, completing this process is a requirement for anyone wanting to launch an ETF.
So far, the SEC has been quite conservative in deploying its stamp of approval on various crypto-based financial products.
This is due to rife risks of market manipulation, illiquidity, and compensation for associated risks. More encouraging is the recent conversation between SEC staff and issuers which suggests a change of heart of the agency.
Sources in the industry argue that these applications’ prospects could improve thanks to the SEC’s readiness to participate in them.
Additionally, a shift to a new regulatory perspective could also improve this. If approved, the Solana ETF will afford institutional investors an accredited way to invest in Solana.
The approval would also mean wider acceptance of blockchain-based financial instruments.
What Next?
The competition to bring the first Solana ETF to market has begun. It is new entrants are Bitwise which is good for the growth of the field while VanEck and 21Shares boast of the experience and financial might in the market.
This competitive environment indicates the potential at stake. This is the share of institutional investors’ attention in the Solana ETF industry that a first entrant might attract.
With SEC inaction, the question of which issuer will ultimately become the market leader in this emerging marketplace increases.
A firm such as Canary Funds which is young and relatively small is better placed to develop innovative ETF products that will address the needs of different investors.
Some people believe that noise trading is a more significant problem, while others claim that established players such as Bitwise and VanEck have better prospects for dealing with intricate regulation.
