Solana ETFs: A 70% Chance of Approval in 2023

The potential approval of exchange-traded funds (ETFs) based on the price of Solana in the U.S. has sparked interest and debate among industry experts. Despite favorable odds, the debut of these ETFs is far from certain, pending regulatory review, ongoing enforcement actions, and public comment on the multiple filings.

Several major asset managers, including Grayscale, Bitwise, Canary, 21Shares, and VanEck, have filed applications for spot Solana ETFs with the U.S. Securities and Exchange Commission (SEC). Eric Balchunas, a senior ETF analyst at Bloomberg, has penciled in a 70% chance that Solana ETFs will be approved this year. However, the timing of the SEC's decision remains uncertain.

The SEC began weighing applications for spot Solana ETFs this week, with a deadline that can be extended as late as Oct. 16. The approval of these ETFs would further broaden access to digital asset-focused products, following the success of spot Bitcoin and Ethereum ETFs. These funds have enabled traditional financial institutions to invest billions of dollars in the top two cryptocurrencies and sent crypto markets upward.

Balchunas noted that the SEC's process under former Chair Gary Gensler was marked by delays in deciding on spot Bitcoin and Ethereum ETFs. He suggested that signals in the upcoming weeks and months may come from lawsuits, statements, and feedback from the SEC on asset managers' proposed rule changes. Additionally, any indication that asset managers have met with the SEC to address questions about Solana ETFs specifically would be a major sign of momentum.

Another area to monitor for developments will be enforcement actions initiated under Gensler's leadership. In its 2023 lawsuit against Coinbase, the SEC alleged that Solana was among several securities trading on Coinbase's platform. If the SEC retreats from its legal fight with Coinbase or drops the Solana claims, it could be a positive sign for the approval of Solana ETFs.

Paul Atkins, Trump's nominee for SEC Chair, could also become a factor if he makes any relevant statements about crypto-focused ETF approvals. Some analysts, like Juan Leon of Bitwise, believe that the conditions under which Solana ETFs could be approved have already been met, given the SEC's change of tune on