BKCM CEO Brian Kelly not too long ago predicted CNBC’s “Quick Cash” that Solana (SOL) may very well be the subsequent cryptocurrency with a spot exchange-traded fund (ETF) in america. Kelly’s prediction got here towards rising curiosity in cryptocurrencies and anticipation of the SEC’s resolution concerning proposed spot Ether ETFs.
Brian Kelly’s Key Factors
Kelly stated that Solana is rating alongside Bitcoin (BTC) and Ethereum (ETH) as one of many main cryptocurrencies for this market cycle, however his daring prediction instantly confronted some pushback from trade consultants, citing a number of vital regulatory and market challenges.
At the beginning, the SEC has categorised Solana as a safety—a reality invoked in lawsuits towards main exchanges like Coinbase and Kraken. As such, it complicates its pathway to approval. In contrast to BTC and ETH, neither of which presently has a spot ETF however do have futures ETFs, Solana doesn’t have this important market infrastructure.
ETF analyst James Seyffart of Bloomberg Intelligence added that the crypto requires a Solana futures product listed on the Chicago Mercantile Trade or a strong cryptocurrency regulatory framework by Congress earlier than any spot ETF.
Present Standing and Future Prospects
At present, Bitcoin and Ether are the one two cryptocurrencies with authorized futures ETFs within the U.S. The main ETF issuers have additionally expressed little curiosity in launching ETFs past the 2 digital belongings. BlackRock, a outstanding ETF issuer, has acknowledged no plans for launching ETFs for different altcoins, together with Solana.
Regardless of these regulatory challenges, the demand for a Solana ETF appears robust. Seyffart thinks the curiosity from traders, outdoors of Bitcoin and Ether, could be monumental for Solana. Nonetheless, these authorized hurdles may make this a really lengthy, rocky street.
Nate Geraci, president of The ETF Retailer, supported Seyffart’s evaluation that there most likely wouldn’t be a spot Solana ETF with out the futures market and clearer guidelines. He stated Congress must institute a respectable regulatory framework for cryptocurrencies earlier than such a product stands any likelihood of approval.
Contrarian Views
Not everybody agrees with Kelly’s prediction. Adam Cochran, a associate at Cinneamhain Ventures, believes that Litecoin (LTC) or Dogecoin (DOGE) is perhaps the subsequent cryptocurrencies to get ETF approval as a result of their easier regulatory profiles.
Each Litecoin and Dogecoin function on a proof-of-work consensus mechanism, much like Bitcoin, which can make their regulatory pathways much less contentious.
The market local weather is at all times fluid, and the SEC’s place may change with the continued regulation popping out. The choice for spot Ether ETFs may very well be an enormous one, probably paving the way in which for an approval of ETFs for different digital belongings, together with Solana.
