Solana ETF: Next in Line After Ethereum Approval?

Crypto investors are on the edge of their seats as the SEC prepares to deliver its verdict on a long-awaited Ethereum ETF. Could a green light trigger a domino effect, paving the way for a wave of altcoin ETFs? And if so, which altcoins are most likely to benefit?

Dive in to find out what analysts are saying about the potential impact on Solana (SOL) and other digital currencies.

Here’s What to Expect

The prospect of an Ethereum ETF approval has analysts hopeful for a ripple effect in the cryptocurrency market. There’s a prevailing belief that if the SEC greenlights an Ethereum ETF, it could open doors for similar products focusing on altcoins.

BKCM CEO Brian Kelly recently speculated in a CNBC interview that Solana might be the next cryptocurrency to receive an ETF. Rumors from Hong Kong also suggest that an issuer is preparing for a SOL ETF.

It’s Not Going to be Easy!

Unlike Ethereum, Solana currently lacks a futures ETF and has been labeled as a security by the SEC, making its ETF prospects more complex. Additionally, a major ETF issuer has shown reluctance to expand beyond Bitcoin and Ethereum.

Altcoins vs Bitcoin: Analyst Weighs In

Bloomberg analyst James Seyffart offered hope, suggesting that CFTC approval of a futures ETF could pave the way for a Solana SPOT ETF, especially with the potential influence of the FIT21 Crypto Bill. However, Seyffart also noted a lukewarm demand for ETFs catering to other altcoins like Litecoin (LTC) and Dogecoin (DOGE).

Cinneamhain Ventures partner Adam Cochran weighed in, proposing that Litecoin (LTC) or Dogecoin (DOGE) might have better odds for the next spot ETF, given their alignment with regulatory expectations due to their proof-of-work consensus mechanisms.

Debate on Altcoin ETFs

While some advocate for expanding the ETF landscape to include various altcoins, Bitwise Investment CEO Hunter Horsley argues against separate ETFs, highlighting the broad exposure provided by Bitwise’s 10 Crypto Index Fund.

Opposition from Bitcoin Maximalists

However, not everyone is enthusiastic about an expanded ETF market.

Bitcoin maximalists, like “The Bitcoin Therapist,” voiced concerns on CNBC, warning against diluting the market with what they term as “lesser-known” cryptocurrencies, or “shitcoins,” fearing it could undermine Bitcoin’s perceived value and legitimacy.

Despite fervent speculation, the path to ETF approval for Ethereum and Solana remains uncertain, entangled in regulatory complexities. Approval would signal acknowledgment of their legal status, potentially complicating matters further in the US market.

It’s worth noting that Solana currently lacks a futures-based ETF in the US, adding another layer of complexity to its ETF journey.

Will the SEC open the floodgates for altcoin ETFs? Only time will tell.

Also Check Out: Solana vs. Litecoin and Dogecoin: The Next Crypto ETF Debate