The Upcoming Crypto ETF Debate: Solana vs. Litecoin and Dogecoin
BKCM CEO Brian Kelly recently made a bold prediction on CNBC’s “Fast Money” show, stating that Solana (SOL) could become the next cryptocurrency to have a spot exchange-traded fund (ETF) in the United States. This prediction comes at a time when there is growing interest in cryptocurrencies and anticipation of the SEC’s decision on proposed spot Ether ETFs.
Kelly emphasized that Solana is emerging as one of the top cryptocurrencies in this market cycle, alongside Bitcoin (BTC) and Ethereum (ETH). However, his prediction faced some skepticism from industry experts who pointed out several regulatory and market challenges.
One major challenge is that the SEC has classified Solana as a security, which has led to lawsuits against major exchanges like Coinbase and Kraken. This classification complicates the approval process for a spot ETF. Unlike BTC and ETH, which currently have futures ETFs, Solana lacks this crucial market infrastructure.
ETF analyst James Seyffart from Bloomberg Intelligence further explained that Solana would need a futures product listed on the Chicago Mercantile Exchange or a well-established cryptocurrency regulatory framework from Congress before a spot ETF can be considered.
Currently, only Bitcoin and Ether have approved futures ETFs in the U.S., and leading ETF issuers have shown little interest in launching ETFs for other cryptocurrencies, including Solana. BlackRock, for example, has stated that it has no plans to launch ETFs for altcoins.
Despite these regulatory challenges, there is strong demand for a Solana ETF. Seyffart believes that investors, apart from Bitcoin and Ether, would be highly interested in a Solana ETF. However, the legal hurdles make the road to approval long and difficult.
Nate Geraci, president of The ETF Store, agrees with Seyffart’s assessment and adds that a spot Solana ETF is unlikely without a futures market and clearer regulations. He believes that Congress needs to establish a legitimate regulatory framework for cryptocurrencies before such a product can have any chance of approval.
Not everyone shares Kelly’s prediction. Adam Cochran, a partner at Cinneamhain Ventures, suggests that Litecoin (LTC) or Dogecoin (DOGE) might be the next cryptocurrencies to receive ETF approval due to their simpler regulatory profiles. Both Litecoin and Dogecoin operate on a proof-of-work consensus mechanism, similar to Bitcoin, which may make their regulatory pathways less contentious.
The market climate is constantly changing, and the SEC’s stance could evolve with the ongoing regulatory developments. The decision on spot Ether ETFs could have significant implications and potentially pave the way for ETF approvals for other digital assets, including Solana.
Tags: Altcoins, Price Analysis