ETFs
XRP, Shiba Inu, Cardano ETFs to Hit SEC Table Soon as Solana Gains on Wall Street ⋆ ZyCrypto
Following the approval of cash exchange-traded funds (ETFs) around Bitcoin (BTC) and Ethereum (ETH), several institutions are considering exploring a broader pool of ETFs.
VanEck, a leading issuer of Bitcoin spot ETFs, has launched its campaign for Solana ETF (SOL) in the United States following a filing with the Securities and Exchange Commission (SEC). Head of Digital Asset Research at VanEck Matthew Sigel confirmed Reports surface of a Solana ETF filing on X (formerly Twitter) citing a range of reasons for the bold move.
According to his statement, the SEC’s decision to approve Ethereum and Bitcoin ETFs laid the groundwork for a large pool of altcoins to make a giant leap to Wall Street. Sigel argues that it was only a matter of time before the securities watchdog gave its blessing to less-capped digital asset ETFs like Solana, XRP, Cardano, Shiba Inu, and more.
He hinged the crux of his argument on the fact that Solana’s native token, SOL, bears several striking similarities to BTC and ETH, allowing users to pay transaction fees on the blockchain. Sigel’s statement highlights SOL’s broad utility for non-fungible tokens (NFTs) and decentralized finance (DeFi) like BTC and ETH.
To fully understand, the executive revealed that the SEC could be influenced by Solana’s decentralized ecosystem, particularly in transaction validation and record-keeping.
“SOL’s decentralized nature, high utility and economic feasibility align with the characteristics of other established digital products, reinforcing our belief that SOL can be a valuable product with use cases for investors, builders and entrepreneurs looking for alternatives to duopoly app stores,” Sigel said.
On its own, experts say the SEC’s decision to end its investigation into Ethereum for potential violations of capital markets laws could offer a measure of credibility for altcoins in their quest to get into ETFs.
Designed to function as both an ETF and a trust, there are a few factors standing in the way of VanEck’s Solana ETF filing. It’s possible the SEC will cite Solana’s recent string of downtimes to reject the application, with critics urging VanEck to hold firm until Ethereum ETF start negotiating.
In the hours following the announcement, SOL price rose 7% to trade at $144 with daily trading volumes up 111%.
Disadvantages of ETFs
Although ETFs provide institutional and retail investors with easy access to digital assets, diversity and a stricter regulatory environment, their operations still carry significant risks.
Right off the bat, the extreme volatility of altcoins can hurt investment valuations, with many critics pointing to the disparity in fee structures compared to traditional assets. Other drawbacks include the risks of tracking errors and the risk that investors miss out on the benefits associated with direct ownership of the asset.
“To reduce the risks associated with ETFs based on virtual assets, regulatory measures must be well prepared,” said a regulator. “At this stage, as the size of virtual assets increases and various products are developed, the impact of virtual assets on investors and the financial market is uncertain, so sufficient regulation is necessary. »