Will the SOL ETF pass? Three reasons why SEC approval cannot be obtained in the short term

1. Asset management giant VanEck, which has issued a Bitcoin spot ETF and is seeking SEC approval for an Ethereum spot ETF, has submitted application documents for Solana ETF (VANECK SOLANA TRUST) to the SEC.

2. Matthew Sigel, director of digital asset research at VanEck, said that Solana (SOL) is a commodity like Bitcoin and Ethereum. SOL's high throughput, low fees, robust security and strong community cohesion make it an attractive fund choice.
3. Analyst’s view:

Bloomberg analyst James Seyffart believes that VanEck’s SOL ETF application is likely to be launched after a new government and the Securities and Exchange Commission in 2025, but it is still not guaranteed.

Evgeny Gaevoy, founder of cryptocurrency market maker Wintermute, believes:

• The chance of SOL ETF being approved this year is almost zero.
• Looking at the inflows into the Ethereum ETF this year, we know that the inflows into SOL will be even less.

Three reasons why Solana ETF needs to fight for a long time to pass:

• Insufficient decentralization

  • Solana is known for its fast transaction speed and low fees, but it sacrifices decentralization.
  • Operating Solana nodes usually requires high-performance hardware data centers, which is very costly and has been dubbed the "computer room chain".
  • Institutions hold a large amount of Solana. The price of Solana collapsed due to the FTX thunderstorm. They may be regarded as not decentralized enough and are recognized as securities.

• SEC regulatory issues

  • Bitcoin and Ethereum have unique hard power in the cryptocurrency market, established through PoW methods by global miners.
  • If the SEC approves Solana ETF, other public chains will also apply, which may cause a proliferation of cryptocurrency ETFs and make regulatory agencies unable to bear the burden.

• Lack of SOL Futures ETF

  • The creation history of Bitcoin and Ethereum spot ETFs shows that a futures ETF is required before applying for a spot ETF.
  • Rob Marrocco, Cboe’s vice president in charge of ETF listings, said that without the establishment of futures markets or changes in regulatory conditions, it is impossible to have cryptocurrency ETFs other than Bitcoin and Ethereum.
  • Even if the Solana futures ETF is launched, it will take a long time to establish a track record and prove that the liquidity is large and transparent.

Based on the above points, it is unlikely that Solana ETF will be passed in the short term. VanEck’s move may be to gain attention and publicity.

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