The Chances of a Solana and Other Altcoins ETF in the US Market Still Low

Bittime - ETFs based on cryptocurrencies such as Bitcoin and Ethereum have seen significant growth, especially in the US market. However, the opportunities for Solana ETFs and other altcoins still seem to be small. 

Solana and Other Altcoin ETFs Hampered by Regulation

Katalin Tischhauser, Head of Investment Research at Sygnum Bank, recently stated that approval of ETFs for crypto assets other than Bitcoin and Ethereum in the US is highly unlikely in the near future.

Tischhauser revealed that the main obstacle to the approval of altcoin ETFs in the US is the lack of SEC-regulated trading venues that are amenable to market surveillance. 

The SEC has a responsibility to ensure that the financial products they approve are free from market abuse, fraud, and manipulation. To achieve this, the SEC monitors the underlying markets by looking at regulated trading venues such as the Chicago Mercantile Exchange (CME) to ensure trading practices are fair, transparent, and free from manipulation.

Popularity of Solana is Far Below Bitcoin and Ethereum

Even if the Solana and other altcoin ETFs are approved, Tischhauser estimates that demand for this product will not be significant. According to him, Ethereum's popularity is only half that of Bitcoin, and other tokens such as Solana are still minimal outside the crypto market.

Since its launch in January, spot Bitcoin ETFs have recorded aggregate inflows of $17.7 billion, indicating significant demand. However, spot Ethereum ETFs had a slower start, with aggregate outflows dominating the first week of trading.  

Tischhauser also noted that the market could look very different for crypto assets outside of Bitcoin and Ethereum when it comes to ETFs. Although Grayscale’s Solana Trust (GSOL) shows demand, the amount of assets under management (AUM) by this fund is much smaller compared to Bitcoin and Ethereum trusts.

VanEck Optimistic on Solana ETF

However, not everyone shares this pessimistic view of the prospects for Solana ETFs and other altcoins. Matthew Sigel, Head of Digital Asset Research at VanEck, disagrees with the idea that Bitcoin and Ethereum will be the only ETFs. 

Sigel also added that VanEck aims to lead this innovation in the US. VanEck even filed a Solana ETF with the SEC on June 27. This indicates confidence that with the right market developments, ETFs based on Solana and other altcoins can thrive in the US market.

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