VanEck Files for Solana ETF, the First of Its Kind, as Crypto Market Extends Rally

- Solana staged its biggest rally in more than a month after VanEck, an exchange-traded-fund issuer, submitted a filing for a product based on the cryptocurrency.

Solana had its biggest rally in more than a month after VanEck, an exchange-traded-fund issuer, submitted paperwork for a product based on the cryptocurrency.

The token rose as much as 11%, the most since late May, after a filing to the Securities and Exchange Commission on Thursday showed that VanEck is seeking to launch the VanEck Solana Trust, which would hold the token directly. A ticker symbol and any fees that would be tied to the fund were not yet listed in the filing.

Solana is currently the fifth-biggest cryptocurrency by market capitalization, according to CoinGecko. The token gained more than 900% in 2023, data compiled by Bloomberg show.

“Solana solidified its place in the ‘Big 3’ last year, not by virtue of its parabolic rise in price, but rather as the most utilized token in Web3,” said Rich Rosenblum, co-CEO of digital-asset firm GSR, referring to a term for a version of a decentralized Internet based on crypto technology.

VanEck’s filing comes on the heels of a raft of new applications for ETFs that would hold or be based on a variety of cryptocurrencies. Issuers have been seeking out innovative ways to release such products following the success of Bitcoin ETFs, which launched earlier this year to much fanfare and managed to garner billions in assets.

The crypto community is now waiting to see when funds based on Ether, the second-largest token, could debut.

Others are attempting to be more experimental: one ETF issuer at the end of last year filed for a fund that is mostly comprised of Bitcoin, but would also include carbon-credit futures. More recently, an issuer filed for a Bitcoin-gold product.

A filing does not guarantee that the SEC will give the products approval to launch. It took more than a decade for Bitcoin ETFs to come to market, and industry-watchers are discussing how soon a Solana ETF could begin trading — if at all.

The SEC is unlikely to approve one by early 2025, but that could change if the regulator is helmed by someone else following this year’s presidential election, said Bloomberg Intelligence analyst James Seyffart.

VanEck’s proposal is the first of its kind for a fund based on the Solana token. Matthew Sigel, VanEck’s head of digital-asset research, said he considers Solana to be a commodity like Bitcoin and Ether.

“It is utilized to pay for transaction fees and computational services on the blockchain,” he said in a post on X, adding that like ether on the Ethereum network, SOL can be traded on digital-asset platforms or used in peer-to-peer transactions.

Other cryptocurrencies were also up on Thursday in New York, with Bitcoin adding about 1% to $61,500 shortly after 11:30 a.m.

(Updates with additional info throughout.)

©2024 Bloomberg L.P.

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