SEC Inches Solana ETF Toward Green Light for Launch
Solana, the high-throughput blockchain network that has garnered attention from developers and retail users alike, is now under the regulatory spotlight. The U.S. Securities and Exchange Commission (SEC) is reviewing proposals for Solana-based spot exchange-traded funds (ETFs).
The SEC's interest in Solana ETFs comes as a natural progression in the growing institutional acceptance of crypto-based investment products. After the successful rollout of spot Bitcoin ETFs earlier this year, attention has turned to other high-cap assets such as Ethereum and now Solana.
The yield-generating nature of many Layer 1 assets, including Solana, makes the legality of staking SOL tokens within the fund structure a relevant topic. Analysts believe it is "likely" that Solana falls under the same regulatory treatment as Bitcoin and Ethereum regarding its status as a commodity.
The SEC's focus is not just on the commodity status of Solana but also on the redemption mechanism within the proposed ETFs, including the swap structure between ETF shares and SOL tokens. Multiple issuers, including Grayscale, VanEck, 21Shares, Canary, Bitwise, Franklin, and Fidelity, have received requests from the SEC to update their S-1 registration filings.
Grayscale, in particular, has been requested by the SEC to update its S-1 registration statements for Solana-based spot ETFs, including the Grayscale Hedera Trust and the conversion of Litecoin Trust into ETFs for listing on Nasdaq and NYSE. This indicates a broader push for Solana-related ETF approvals.
The SEC is expected to return comments on the updated S-1 filings for Solana ETF proposals within 30 days. If issuers respond quickly, approval for Solana ETFs could come as soon as late July. This has sparked renewed optimism in the market, as indicated by a sharp increase in the odds of a July approval on prediction platform Polymarket.
Bloomberg analysts have raised the probability of a Solana spot ETF approval to 90%. Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence, stated that the SEC asking for updated S-1s is a positive signal.
Technical analysts note that SOL is currently testing a descending channel, with a potential target near $183 if bullish momentum continues. SOL surged by over 4.5% intraday due to the increased optimism around Solana ETFs.
The earliest potential approval date for a Solana spot ETF is currently projected for October 10, 2025. However, with the current pace of progress, industry watchers believe a final SEC decision could come as early as July.
In conclusion, the review of Solana ETF proposals by the SEC signals a significant step forward in the institutional acceptance of Solana and the broader cryptocurrency market. The potential approval of Solana ETFs could open up new avenues for investment and further boost the popularity of Solana and other high-cap assets.
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