Bloomberg Analyst: Solana Slated for Approval as Spotlight Shifts Following Ethereum ETF

With the Spot Ethereum exchange-traded funds (ETFs) on a solid path to a full approval within the next months, investors’ attention turns to other Altcoins. Bloomberg ETF analyst James Seyffart believes the next to see a fund may be Solana or Litecoin.

Related: Nvidia Smashes Earnings Estimates, Fuels AI Boom and Altcoin Run

The comments were made after Brian Kelly, CEO and founder of digital asset investment company BKCM LLC, told CNBC he thinks Solana is potentially next in line:

Oh weird @cnbc says $SOL is the next ETF.

Hmm, where have I heard that before… pic.twitter.com/aYAedMhcM0

— ◢ J◎e McCann 🧊 (@joemccann) May 22, 2024

Solana ETF With Most Demand, Says Analyst

But Seyffart dampened any hopes that we will see a Solana ETF anytime soon. He said given the current situation and how long the Bitcoin and Ethereum approval process took it may be years until we see a Solana spot fund.

According to the analyst, SOL will need to have a futures fund for some years first before a spot fund can happen – although regulatory changes, as we have just witnessed with FIT21, may speed things up.

Based on current precedent/needs — Will happen within a few years of getting a CFTC regulated futures market. But congress & Market structure bills like FIT21 could make it happen quicker.

I think a SOL ETF would see most demand vs other digital assets (aside from BTC & ETH)

— James Seyffart (@JSeyff) May 22, 2024

Other ETFs Could Be Approved First Based on Security Definition

But there could be a major obstacle in Solana’s path – the question of whether SOL is a security or not. Seyffart said that the “SEC isn’t dancing around SOL’s status like they have ETH”, pointing toward lawsuits brought against Kraken and others where the regulator clearly has deemed SOL a security.

While some argue that based on sufficient decentralisation Solana would likely fall under jurisdiction of the Commodity Futures Trading Commission (CFTC), Seyffart argues the SEC still “decides on the approval orders for all ETFs”.

He added:

Adam Cochran of venture fund Cinneamhain Ventures said that due to a clearer legal path, he sees Dogecoin and Litecoin getting funds first – despite possibly lower demand.

I think you get LTC and DOGE first.

Much lower demand, but cleaner paths.

— Adam Cochran (adamscochran.eth) (@adamscochran) May 22, 2024

Litecoin founder Charlie Lee said in April that he believed a Litecoin fund would potentially see less regulatory headwinds as it’s closer related to Bitcoin.

Then again, Lee also didn’t really believe in an Ether ETF, saying its “path to an ETF is much harder than Bitcoin’s”, and added that the security question still needs to be addressed.

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