Despite favorable odds for approval, the debut of exchange-traded funds based on the price of Solana in the U.S. is far from certain pending regulatory review, ongoing enforcement actions, and public comment on the multiple filings.
A lot can change for Solana hopefuls before they potentially start trading.
“Right now, the only thing that’s happened is they didn’t get a phone call telling them to go away,” Bloomberg Senior ETF Analyst Eric Balchunas told Decrypt.
The SEC began weighing applications for spot Solana ETFs this week. In this case, its deadline—which the agency has brushed up against in approving other crypto funds—can be extended as late as Oct. 16.
The Solana ETFs would further broaden access to digital asset-focused products following the dramatic success of spot Bitcoin and Ethereum ETFs since their respective approvals last year. Those funds enabled traditional financial institutions to invest billions of dollars in the top two cryptocurrencies and sent crypto markets upward.
Among major asset managers, Grayscale, Bitwise, Canary, 21Shares, and VanEck have all filed applications for spot Solana ETFs with the SEC.
Balchunas has penciled in a 70% chance that Solana ETFs are approved this year. But when it comes to an SEC green light, Balchunas said that the timing remains a mystery.
Our official alt coin ETF approval odds are out. Litecoin leads w 90% chance, then Doge, followed by Solana and XRP. We are only doing for 33 Act $IBIT-esque filings. But def poss to see futures or Cayman-subsidiary type 40 Act stuff get through as well. https://t.co/JSaNnifjbu
— Eric Balchunas (@EricBalchunas) February 10, 2025
While the SEC has adopted a crypto-friendly stance under President Donald Trump, Balchunas said it’s unclear how the process may unfold. Under former SEC Chair Gary Gensler, the agency delayed its decision on spot Bitcoin and Ethereum ETFs until the last moment.
“It would certainly be a refreshing signal if they didn’t punt three times,” he said, referring to the SEC’s earlier delays. “There’s a better chance of it taking less time than there was under Gensler.”
Balchunas said signals in the upcoming weeks and months may come from a few places, and there are specific things that ETF watchers are scrutinizing.
Lawsuits, statements, and feedback
If the SEC begins providing feedback on asset managers’ proposed rule changes outlined in 19b-4 filings or registration statements, then Balchunas said that would be a “huge” sign of momentum for spot Solana ETFs. It would show the SEC is engaging materially with asset managers.
Any indication that asset managers have also met with the SEC to address questions about Solana ETFs specifically “would be major,” he said.
Another area to monitor for developments will be enforcement actions initiated under Gensler’s leadership. In its 2023 lawsuit against Coinbase, for example, the regulator alleged that Solana was among several securities trading on Coinbase’s platform.
The SEC’s lawsuit was postponed last month after a New York federal judge granted Coinbase’s so-called motion for interlocutory appeal. Amid conflicting rulings about how securities laws apply to crypto, the move gave the go-ahead for a higher court to weigh in.
If the SEC retreats from its legal fight with Coinbase, or drops the Solana claims, then that would be another good sign that applications are gaining approval momentum, Balchunas said.
Finally, Trump’s nominee for SEC Chair, Paul Atkins, could become a factor. Although Atkins hasn’t been confirmed by the Senate yet, if he says anything interpreted as relevant to crypto-focused ETF approvals, Balchunas said it would be another positive signal.
‘In the bag’
With Trump’s crypto-friendly regime, some analysts are wondering whether the conditions under which Solana ETFs could be approved have already been met.
“I don’t want to say it’s in the bag, but the SEC’s change of tune is really something,” Bitwise Senior Investment Strategist Juan Leon told Decrypt. “It’s really been a 180.”
For years, the SEC highlighted fraud and market manipulation concerns in denying applications for spot Bitcoin ETFs. However, Grayscale’s legal triumph in 2023 led to the approval of spot Bitcoin ETFs months later.
In a Washington, D.C., appellate court, a panel of judges found that the SEC’s denial of Grayscale’s bid to convert its flagship fund into a spot ETF was “arbitrary and capricious.”
The SEC had already approved Bitcoin futures ETFs, and the judges found that the presence of a regulated futures market should be enough to address the agency’s fraud and market manipulation concerns.
Earlier this week, Coinbase’s derivatives arm debuted futures contracts for Solana, which are regulated by the U.S. Commodity Futures Trading Commission.
Leon said the SEC could drop the presence of regulated futures markets as a consideration or requirement for Solana ETFs, but Coinbase’s move likely had the same effect.
“I think this move by Coinbase really increases the odds of a Solana ETF,” he said. “Now there’s a regulated market that they’ll be able to look at.”
Edited by James Rubin
