The head of Digital Assets Research at VanEck, Matthew Sigel, recently confirmed that the company’s proposal for a Solana spot ETF is banking on Donald Trump winning the US presidency. This move comes amid speculation and uncertainty surrounding the outcome of the upcoming US Presidential elections in November. The deadline for VanEck’s application is set for March 2025, which indicates a strategic decision to place the proposal well beyond the expected aftermath of the elections. The analysts have expressed that the approval odds for the Solana ETF are significantly higher if Trump emerges victorious, with the chances being “near zero” in the case of a Democrat victory and Joe Biden staying in office.
One of the key factors influencing the potential approval of the Solana ETF is the lack of a futures market on CME. This absence of a futures market has historically been a critical component in gaining regulatory approval for spot Bitcoin and Ethereum ETFs. Grayscale, in its arguments against the SEC, emphasized the importance of surveillance sharing agreements similar to those in place for CME Bitcoin futures. These agreements were deemed crucial for detecting and preventing fraudulent activities in the cryptocurrency market. The debate centered around the SEC’s treatment of spot Bitcoin ETFs compared to futures ETFs and the consistency in applying regulatory standards across different types of Bitcoin-related ETFs.
Despite the importance placed on surveillance sharing agreements, recent developments suggest a shift in regulatory expectations. Bloomberg analysts noted that past ETF filings have included SSAs with cryptocurrency exchanges like Coinbase, but these agreements have proven to be less critical than anticipated. The ongoing securities lawsuits against major exchanges by the SEC, such as Coinbase and Kraken, have further complicated the landscape of surveillance-sharing agreements between exchanges and ETF issuers.
Future Outlook and Regulatory Considerations
While the approval of spot ETFs for Bitcoin and Ethereum by the SEC signals progress in the regulatory landscape, the path for Solana ETF approval remains uncertain. Sigel of VanEck remains optimistic about the prospects of the Solana ETF, citing surveillance sharing agreements with spot crypto exchanges as a substitute for the absence of a CME futures market. However, the ultimate success of VanEck’s approach hinges on potential changes in SEC leadership or legislative interventions by Congress. The evolving dynamics of the cryptocurrency market and regulatory environment continue to shape the future of ETFs like Solana, with political outcomes playing a significant role in determining the path forward.
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