Solana ETF Approval Date: Is It Coming Soon in 2024?

One year ago, Solana traded at a 90% low from its all-time high (ATH) of $260. That time, if someone had told us that the Solana ETF might be coming, we would have laughed, thinking it was a joke.

Fast-forward to today, we're seriously discussing the Solana ETF approval date and the odds of it becoming a reality.

So, is it a dream, or is Solana ETF approval coming up soon?

Let's find out.

A Brief About Solana ETFs

Discussions about Solana ETFs approval began after the US SEC accredited the Spot Bitcoin ETF on January 11 this year and gave the green flag to similar Ethereum ETFs on May 23, 2024.

After these historic regulatory developments, two prominent Investment management firms, VanEck and 21Shares, filed applications to list the first-ever US exchange-traded funds backed with the spot price of Solana. These applications came in to benefit from the positive shift in the regulatory attitude of the US SEC towards crypto ETFs. Both VanEck and 21Shares have previously gained approval for their spot Bitcoin ETFs. As a result, they are now seeking the first-mover advantage in other crypto ETFs. The Solana ETF approval will significantly expand their offerings since Solana is the fourth largest crypto by market cap.

Read more about Ethereum price prediction after ETF approval.

Let's know about these Solana ETFs in detail.

VanEck Solana ETF

VanEck applied for Solana ETFs on June 27, 2024, and became the first American company to file for a US-based Solana ETF. According to its S-1 filing, the VanEck Solana Trust ETF would track the Solana price performance and, if approved by the SEC, would be live on the Cboe BZX exchange. While applying, VanEck also said that definitive regulatory guidance has yet to be provided on whether and how registered broker-dealers can comply with rules regarding transactions and holding of spot SOL.

While sharing views about Solana ETF approval chances on X post, VanEck's head of digital asset research, Matt Sigel, emphasized that SOL works like Bitcoin and Ether because it is used to pay for transactions and computational powers on the Solana blockchain. It can also be traded on digital asset platforms and for peer-to-peer transactions. His view signalled VanEck's support towards the opinion that SOL should be treated as a commodity despite the SEC classifying it as unregistered security in various lawsuits. That might be why VanEck became the pioneer platform in the US to apply for Solana ETF approval so that its customers can benefit from Solana's decentralized and high utility nature.

Sigel also shared the reason behind applying for Solana ETFs this year. He said, "We believe that the regulatory landscape is shifting". He further noted that VanEck believes the Trump campaign will win re-election, which would likely ease the regulatory burden on financial firms given Trump's pro-crypto stance. He also hinted towards a strong chance of their SOL ETF being approved regardless of the election outcome, predicting SEC Chairman Gary Gensler's departure can come soon.

21Shares Solana ETF

Only a day after VanEck applied for Solana ETF approval, 21Shares, another Digital asset investment management firm, filed for permission to launch an ETF tied to the spot price of SOL on June 28, 2024.

CBOE, the exchange on which 21Shares and VanEck plan to list their Solana ETF post-approval, will also need separate permission to change the rules and allow these new products to trade. Both these filings have managed to drive the SOL price over 9.4% in a week. In an email by etf.com, the head of legal in 21Shares said that the company is excited about a US-based ETF that will provide access to the Solana ecosystem. When asked about their Solana ETF approval, he added, "We believe this is a necessary step for the crypto industry and holds true to our mission to bring to market crypto-centric products easily accessible". However, 21Shares has not yet specified a fee for the Solana fund.

Interestingly, 21Shares already offers a Solana-backed product on European exchanges. This product is called 21Shares Solana Staking ETP, and it follows Solana's performance while capturing staking yields. 21Shares reinvests the staking yields back into the ETP. Currently, this product has nearly $811.1 million worth of assets under management. Moreover, 21Shares also offers funds that track other altcoins like Cardanoand Polkadot. Now, it is waiting for its Solana ETF approval to expand its offerings.

Challenges in Solana ETF Approval

The history of spot crypto ETFs in the USA is quite tricky, making it evident that the Solana ETF approval will be challenging.

These are some key hurdles in the way of Solana ETF approval :

Regulatory Hurdles

The US SEC has been taking a regressive stance regarding crypto ETFs. This is why Bitcoin Spot ETFs took nearly ten years from the first application to final approval. A similar pattern was seen in the Ethereum Spot ETFs, which were approved moments before the deadline given to the US SEC for review. Regarding Solana ETF approval, the odds look low as the SEC classifies Solana as a security. Last year, it even sued various international crypto exchanges to offer unregistered securities, including Solana and other cryptocurrencies like Polygon and Cardano. In such a scenario, the SEC's stance on SOL can prove a major setback when it comes to approving Solana ETFs.

The SEC often uses the Howey Test approach to determine whether an asset classifies as a security. However, the efficiency of this test on digital assets has been inconsistent, causing a lack of clarity. The factor that helps clear up the doubts is "sufficient decentralization." Many regulators check this parameter in digital assets to exempt them from certain securities laws. This criteria remains vague regarding Solana, causing confusion among market regulators.

Political Uncertainty

The upcoming Presidential elections in the USA may also delay the Solana ETF approval date. The two most popular presidential candidates in these elections have shown polar opinions over cryptocurrencies and their legitimization. While the victory of former President Donald Trump may create a more favourable regulatory ecosystem for crypto, the triumph of Kamala Harris or another presidential candidate can have the opposite effect. Moreover, the discussions and decisions on Solana ETF may take a backseat with such a fast-changing political landscape in the upcoming months.

Absence of Solana Futures

Along with regulatory uncertainty and political timings, the Solana ETF approval also has another challenge. The US SEC has previously expressed that no spot crypto ETF can be listed on the US stock market until the asset has a highly correlated and regulated futures market. Since Solana does not have a corresponding futures market in the USA like Bitcoin and Ethereum, its spot ETF may face rejection or delay by the SEC. Furthermore, Solana's previous network outages and hacks may add to its reliability and legitimacy concerns, adversely affecting the SEC's decision. However, SEC Commissioner Hester Peirce indicated that Solana spot ETFs may get issued without a futures market.

Low Demand

Low demand can also affect the Solana ETF approval in the upcoming months, as the issuers may lose interest in getting their applications approved. The head of Digital Assets at BlackRock, Robert Mitchnick, said in March that Bitcoin was the number one focus of its clients among crypto assets. He also shared that there was little demand for Ethereum and very little for other crypto assets. This could be the key reason behind BlackRock not filing for Solana spot ETF yet. However, this may change soon as speculations have begun to heat up around BlackRock potentially planning to apply for Solana ETFs and get approval. According to a few sources, BlackRock is reportedly considering applying for a Solana-centric ETF in July. If this rumour turns out to be accurate, the probability of a Solana ETF approval can strengthen, given BlackRock's impeccable ETF approval track record with the SEC. It is just speculation so far; investors must keenly observe the next step of BlackRock to get a clear answer.

Overall Market Health

The last factor that covers all the unforeseen hurdles in the path of Solana ETF approval is the overall market health. As the crypto market has a long history of black swan events like Terra LUNA collapse and rug pulls, any such event shortly may cause the SEC to discard the Solana ETFs for now. On the other hand, a positive crypto market can encourage the SEC to give approvals on VanEck's and 21Shares's Solana ETF requests. The overall health and resilience of the Solana ecosystem amid the rising traffic due to Solana-based meme coins will also crucially affect the SEC's decision.

What will the Solana ETF Approval Date be?

According to multiple sources, the Solana ETF approval date may be around mid-March 2025. The exchange operator Cboe (Chicago Board Options Exchange) filed two Form 19b-4 applications with the U.S. Securities and Exchange Commission on July 8, 2024, to list the VanEck and 21Shares' ETF tied to SOL. After this step, the SEC must decide on these ETF requests by March 2025 because it has 240 calendar days to decide. However, for the clock to begin, the SEC first needs to acknowledge these filings by Cboe.

The famous Bloomberg ETF analyst Eric Balchunas tweeted the same deadline for the Solana ETF but added that November is the most significant date in this interim. He ended the tweet by conveying that the Solana ETF approval may not come if Joe Biden wins, but anything will be possible if Trump wins. This is because figures like former President Donald Trump have softened their opposition to crypto while Biden is on the opposing side. Thus, if Trump wins, the US will likely move towards becoming a crypto-friendly country, which can directly affect the SEC's decision on Solana ETFs. Historically, the SEC has always given its final decision around the deadline for crypto ETF applications, and we expect the same pattern to repeat this time.

On the other hand, Katalin Tischhauser, Sygnum Bank's head of investment research, said that a Solana ETF is unlikely before 2026. This is possible if the SEC rejects the Solana ETF applications filed by VanEck and 21Shares.

Hence, the Solana ETF approval date cannot be predicted with certainty until we gain more clarity in the upcoming months.

Will Solana ETFs Get the SEC’s Approval?

Whether Solana ETFs will get the SEC's approval depends on various factors. The first and foremost factor is the upcoming US presidential elections, which will decide the next government and its stance on crypto assets. If Donald Trump wins the elections and becomes the next US president, he can propel crypto-friendly policies as a crypto supporter. In that scenario, the SEC may approve the Solana ETFs to avoid scrutiny. On the other hand, if a crypto-opposing candidate wins, the SEC may postpone the Solana ETF approval date. Secondly, the overall crypto market sentiments will also play a crucial role in the Solana ETF approval. If the market turns bullish and maintains a healthy space free of collapses and halts, the chances of Solana ETF approval will likely improve.  Thus, the upcoming 2-3 months and the events occurring in them will play a crucial role in deciding the fate of Solana ETFs.

How will Solana ETF Approval Affect SOL Price?

Multiple crypto analysts have forecasted a bullish price performance for SOL if the Solana ETFs get approval in the USA.

Recent research by famous crypto market maker GSR Markets predicts that the Solana price can increase ninefold if VanEck's and 21Shares Solana ETFs are approved. In its report published in June, GSR Markets called Solana one of crypto's big three. As per its assessment, Spot Solana ETFs can draw 14% of Bitcoin ETF flows, considering their respective market sizes. Based on this optimistic assumption by GSR, the SOL price can jump from $149 to $1320 after the Solana ETF approval. However, the report by GSR Markets provided some cautious cases to consider, too.

• In GSR Markets' bearish scenario, the Spot Solana ETFs would capture 2% of Bitcoin spot ETF inflows, causing the SOL price to surge to 1.4x.
• In the baseline scenario, spot Solana ETFs can grab 5% of Bitcoin inflows, surging SOL price to 3.4x.

GSR further added that this projection may go higher if the Solana ETFs offer staking rewards, which are not there in the spot Ether ETFs.

However, not all analysts are this bullish on Solana ETF approval. For instance, Bloomberg analyst Eric Balchunas and others expressed that a change in US presidential candidate and SEC leadership is required for a Solana spot ETF to exist in the USA. The thought behind it is SEC chairman Gary Gensler's past decision to classify the SOL token as a security, making it less likely for the Solana ETF applications to get approval.

Another factor to consider is the post-approval scenario. Recently, eight Ethereum spot ETFs went live in the US stock market. However, the market did not receive an expected price rebound from ETH. This happened despite the ether exchange-traded funds drawing $107 million of net inflows on their first trading day, indicating a strong demand. On the same day, ETH price experienced a 6% drop due to the bearish market sentiments. The same can happen with the SOL price in the short term if its spot ETFs get the approval. However, the long-term aspect looks strongly bullish, given the high trading activity, respectable ranking and other developments associated with Solana.

Can Solana Reach $1000 after ETF Approval?

Yes, Solana (SOL) can reach $1000 after ETF approval, as the ETFs will significantly improve its accessibility and reputation among potential investors. Since exchange-traded Funds (ETFs) attract institutional and retail investors, they will enhance Solana's overall liquidity and demand. By making SOL more accessible, these ETFs simplify the investment process, allowing a broader audience to invest without requiring direct cryptocurrency purchases or owning complex digital wallets.

Moreover, ETFs are generally perceived as regulated and secure investment vehicles, thereby improving Solana's credibility in the eyes of conservative investors who hesitate to enter the cryptocurrency market. This heightened awareness can drive significant capital inflow from seasoned and new investors, contributing to a price surge.

Additionally, Solana will stand out in altcoins as one of the few cryptocurrencies with its spot ETF listed in the USA, alongside Bitcoin and Ethereum. This exclusivity can further boost its appeal and perceived value due to its smaller market cap, potentially driving its price to new heights.

Even if we look at the effect of Bitcoin ETFs on Bitcoin, the asset reached a new all-time high (ATH) within months of its ETF going live. This rapid increase in Bitcoin's value post-ETF approval underscores the substantial impact such financial products can have on cryptocurrency prices. All these reasons can potentially propel the SOL price towards the $1000 mark in the next two years.

Read more about Solana price possibilities in our Solana price prediction.

Is Solana ETF Coming in 2024?

The probability of a Solana ETF in 2024 doesn't look high. While recent developments, such as the US SEC's approval of Bitcoin and Ethereum ETFs, have paved the way for potential Solana ETFs, several hurdles remain. VanEck and 21Shares have filed applications for Solana ETFs, indicating growing interest. However, unlike Bitcoin and Ethereum, the SEC currently classifies Solana as a security. Additionally, Solana lacks a corresponding futures market, a factor the SEC considers crucial for ETF approval.

The upcoming US presidential elections could also impact the approval process. A crypto-friendly administration might facilitate a favourable regulatory environment, but the SEC is still likely to take its sweet time deciding on the ETF.

FAQs

What is the Solana ETF approval date?

If things go as planned, the Solana ETF approval date will likely be around mid-March 2025. This timing is based on the ETF applications filed by VanEck and 21Shares, with deadlines set 240 days from their filing dates. The SEC is expected to announce its final decision on these crypto ETFs close to these deadlines.

Is there an ETF for Solana?

No, there is no tradable ETF for Solana yet. However, multiple investment firms from different countries have applied for Solana Spot ETFs in the past few years and may get approval in the upcoming time. These institutions include America's VanEck and 21Shares, along with Canada's 3iQ. However, there are multiple Solana ETPs in the market to consider.

What are the chances of Solana ETFs to get the approvals?

The current chances of Solana's spot ETFs getting approval are low. This is because the US SEC classifies SOL as a security, unlike Bitcoin and Ethereum. Additionally, Solana also does not have corresponding future contracts, which is a criterion that the SEC considers when approving a crypto ETF. However, the chances of Solana ETF approval may improve if a crypto-supportive candidate wins the upcoming US presidential election.

Where to buy Solana (SOL) in India?

You can buy SOL tokens from a trusted FIU-registered cryptocurrency exchange like Flitpay.

To buy Solana (SOL) tokens in india

1. Register on Flitpay and create an account.

2. Verify your identity through Know-your-customer (KYC)

3. Add INR or Fiat currency corresponding to the amount of Solana tokens you want to buy.

4. Instantly buy Solana (SOL) with the deposited funds.