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Could Solana (SOL) Be the Next Cryptocurrency to Get an ETF in 2024?

In this second quarter of the year, excitement is brewing over the possibility of a Solana (SOL) exchange-traded fund (ETF). In a recent interview, Austin Federa from the Solana Foundation discussed the potential for Solana to get its own ETF, similar to the newly approved Ethereum ETF. 

After ETH ETF, is Solana ETF Next? 

While analyzing Solana, Federa praised the Ethereum community for reaching a milestone and hoped other proof-of-stake networks, like Solana, would follow suit. He stressed regulated financial products that give added security to the investors and the ease of incorporating crypto in retirement accounts. 

Federa noted significant developments within the Solana ecosystem. Innovations such as Jupiter and Phoenix’s decentralized trading platforms have showcased Solana’s trading performance, while projects like Helium’s decentralized cell network are pushing technological boundaries. 

US Government and Blockchain Adoption

Regarding government adoption, Federa mentioned that while it’s too early to say if the US government will adopt Solana specifically, there’s increasing interest in blockchain technology for its potential to maintain US dollar dominance internationally. However, before that stablecoin legislation could be a significant step towards this goal.

Solana vs Ethereum

Federa said Solana doesn’t need to outperform Ethereum in market cap. Long-term technology vision and ecosystem growth are priorities. The blockchain sector is young and has huge development potential, he added.

Why Solana?

On top of that, Solana’s single global state design allows for atomic composability, which is crucial for DeFi and other applications. With high transaction throughput and rapid block finality, Solana offers a unique blend of speed and efficiency that sets it apart from modular blockchain systems.

Analyst differs on the Solana ETF Timeline

However, like many experts, JPMorgan’s Nikolaos Panigirtzoglou is also skeptical, noting the uncertainty over Ethereum’s classification as a security. He doubts the SEC will approve other ETFs, as it considers most tokens, except Bitcoin and Ethereum, to be securities. He also pointed out how Ethereum ETFs are approved due to political pressure and emphasized the need for new legislation for broader ETF approvals. 

Nate Geraci, co-founder and President of the ETF Institute, is also skeptical of Solana ETFs, as Congress should have a clear regulatory framework for digital assets in the US to approve other ETFs.

However, Bloomberg analyst James Seyffart offered some hope and predicted a Solana ETF to be successful in the coming years, especially with legislation like FIT21 defining securities and futures markets. But he also acknowledges Solana’s security status as a potential obstacle. 

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.

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