Which crypto fund will be next?

The approval of the Spot Ethereum ETF has given the crypto community hope for the launch of other altcoin-based funds.

Last week, the U.S. Securities and Exchange Commission (SECOND) has approved applications to open Ethereum spot ETFs. The cryptocurrency community sees this initiative as an opportunity to launch funds with other leading altcoins, including Solana ETFs.

How a spot ETF works

A place FNB is a tool through which exchange participants can invest in digital cryptocurrencies without purchasing or storing them in physical form. This procedure is based on monitoring the real market price of the asset.

After purchasing shares of a spot ETF, the investor receives a stake in the fund. The fund represents a certain volume of cryptocurrencies in their real form. Fund specialists manage the portfolio.

With a place in the Bitcoin ETF investors can easily gain exposure to cryptocurrency. They do not need to buy, hold or manage their portfolios independently, which could provide an incentive to invest more in the cryptocurrency market.

Crypto ETFs Accepted in the United States

In late 2021, the SEC approved the launch of Bitcoin futures ETFs for the first time. Then, in January 2024, the SEC approved the first 11 Bitcoin spot ETFs. Shades of greyThe SEC’s lawsuit against her was key to changing the regulator’s position.

The victory in this case and the subsequent recognition of the legality of spot ETFs have helped to bridge the gap between digital and traditional assets. Grayscale, which previously operated the Bitcoin Trust with some restrictions, now has the opportunity to transform into a full-fledged ETF.

Altcoin ETFs

The SEC has approved Forms 19b-4 for eight Ethereum-based exchange-traded funds (Grayscale, Bitwise, Black rock, Van EckARK 21Actions, Invesco, loyaltyand Franklin) in a single decision, marking the beginning of altcoin-based ETFs.

Following the approval of the Ethereum ETF, the crypto community is wondering whether funds based on other popular altcoins will see the green light.

Solana Exchange Traded Fund (ETF)

Solana (GROUND), a rising star in the blockchain space, could also be a candidate for its spot ETF. The creation of the Solana ETFs are still subject to regulatory approval. To do so, the fund issuer must demonstrate that the funds meet all legal and regulatory standards, including investor protection and market integrity.

Although the exact timeline for approval remains uncertain, experts believe that Solana could soon enter the spot cryptocurrency ETF market.

What industry players are saying

Brian Kelly, CEO of investment firm BKCM, said that after the legalization of Ethereum spot ETFs, Solana ETFs will enter the US stock market. altcoin will become ETH’s main competitor.

Bloomberg ETF analyst James Seyffart also noted that after Bitcoin and Ethereum ETFs, exchange-traded fund providers will likely turn their attention to Solana.

According to Seyffart, it will be a few years before the crypto derivatives market is fully supervised by the U.S. Commodity Futures Trading Commission (CFTC). The expert stressed that Approval The Financial Innovation and Technology for the 21st Century (FIT21) bill can accelerate this process.

Bitwise Investment CEO Hunter Horsley has claimed that by the end of 2024, the cryptocurrency community will be surprised by the number of financial firms that will invest their capital in Bitcoin spot ETFs.

Bitwise’s head is confident that the distribution of a new class of digital assets will make the cryptocurrency market even more attractive to investors.

Tristan Frizza, Founder of Zeta Markets, told crypto.news that many consider BTC, ETH, and SOL to be the three most important cryptocurrencies of this market cycle. Therefore, with the approval of the ETH ETF, SOL will likely be the next ETF candidate.

“While Bitcoin has been touted as ‘digital gold’ and Ethereum has an institutional focus, Solana is the network adopted by retail users with consistently high activity metrics. The recent boom in protocol launches and TGE tokens on Solana has also brought significant attention, users and capital inflows to the network, and the anticipation of further growth will make Solana seem more likely to be a top asset to consider for the ETF.”

Tristan Frizza, Founder of Zeta Markets

While nothing is yet clear, the impact of such an ETF approval will likely attract further attention, capital, developer and user activity, which will further spin Solana’s existing flywheel, which is what many of the network’s backers are likely counting on, Frizza concluded.

crypto.news also reached out to the Solana Foundation team for comment regarding the likelihood of the Solana ETF being approved.

Conclusion: Will the crypto industry see Solana ETFs?

The SEC’s approval of Bitcoin spot ETFs has sparked interest in the potential of Solana-based ETFs, which could make investing in the SOL token more accessible to everyone.

Approval of an altcoin ETF would be a significant step, potentially similar to the approval of Bitcoin and Ethereum spot ETFs. It would promise to attract more institutional players to the cryptocurrency market.

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