Bijie.com reports:
Shanghai—Zhao Yi, China Times
Following the regulatory approval of Bitcoin and Ethereum spot ETFs, Wall Street is shifting its focus to other cryptocurrencies.
Recently, asset management giant VanEck submitted a filing to the U.S. Securities and Exchange Commission (SEC) for a Solana ETF (VanEck Solana Trust). The fund plans to issue common shares and list on the Cboe BZX Exchange, with specific listing timing pending issuance notice. Shortly after, 21Shares also filed an S-1 for a Solana ETF.
“This application is merely a commercial move by institutions and does not imply regulatory sentiment,” said Jiang Zhaosheng, Senior Researcher at Okey Chain Research Institute, to Huaxia Times. “Given the current U.S. political environment and cryptocurrency regulatory landscape, the probability of Solana’s near-term approval is not high. The key issue remains Solana’s classification—if it continues to be classified as a security, approval may be challenging.”
Approval Prospects in Doubt
Matthew Sigel, Director of Digital Asset Research at VanEck, stated that applying for a Solana ETF demonstrates VanEck’s long-term commitment to the cryptocurrency market and reflects their strong confidence in Solana’s technology and ecosystem. He emphasized that while the exact listing timing awaits issuance notice, VanEck is fully prepared.
In its filing, VanEck noted that neither the Trust, the Sponsor, the SOL token custodian, nor any other party associated with the Trust will directly or indirectly use any SOL of the Trust for staking to earn rewards or generate other income. Currently, subscriptions and redemptions are conducted solely in cash, meaning the ETF does not support staking.
Regarding the rationale for applying for a Solana ETF, Matthew Sigel explained, “As a competitor to Ethereum, we believe Solana’s combination of high throughput, low fees, robust security, and strong community makes it an attractive choice for an exchange-traded fund, providing investors with exposure to a multifunctional and innovative open-source ecosystem.”
Despite the SEC’s previous assertion in court that the asset should be classified as a security, VanEck considers the SOL token a distinct commodity.
“VanEck and 21Shares filing for a Solana ETF was somewhat unexpected yet within reason,” commented Jiang Zhaosheng. “Previously, the SEC explicitly stated in related litigation that SOL is an unregistered security, which differs fundamentally from previous BTC and ETH ETF approvals.”
Jiang Zhaosheng further noted, “Under the current framework, launching a spot ETF in the U.S. requires a regulated futures market. The futures market must have existed for several years to demonstrate sufficient relevance and accurate market prices before considering launching a spot ETF product. Currently, SOL lacks a futures market, so bypassing a futures ETF and applying directly for a spot ETF theoretically does not meet SEC requirements.”
Following VanEck, 21Shares under Kathy Wood also submitted an S-1 form for 21Shares Core Solana ETF to the SEC. In fact, cryptocurrency asset management company 3iQ had already applied for North America’s first spot Solana ETF in Canada a week earlier.
Yuan Jingning, Co-Chair of the Blockchain Special Committee of the China Communications Industry Association and President of Uweb, stated to Huaxia Times, “The choice of Solana by asset management giants as the target of an ETF reflects high recognition of its technological innovation and market potential. From a market demand perspective, investors are increasingly diversifying their crypto asset allocations. Bitcoin and Ethereum have already established significant positions among investors, prompting them to seek new investment opportunities for risk diversification and profit maximization.”
Currently, the industry is not optimistic about the approval prospects of a Solana ETF. Evgeny Gaevoy, Founder of cryptocurrency market maker Wintermute, believes that adoption of cryptocurrencies takes time and a Solana ETF won’t be approved in the short term. He added that assuming this would be a priority for the Trump administration is quite naive. Even if a Solana ETF is approved, the inflow of funds would likely be minimal compared to Bitcoin ETFs.
According to Yuan Jingning, whether a Solana ETF is approved depends on a series of complex factors. Technological maturity is a crucial factor; asset management companies need to provide sufficient market research and data to prove the market potential and investor demand for a Solana ETF. Regulatory environment and preparedness and response strategies of asset management companies are also decisive factors.
Yuan Jingning further stated, “Currently, the SEC’s regulatory attitude towards products related to crypto assets is cautious. Despite an increasing number of applications for crypto asset products, the SEC will carefully assess the transparency, compliance, and investor protection measures of these products during the approval process. Therefore, applying institutions need to ensure that their Solana ETF fully complies with regulatory requirements in design and operation and can provide adequate investor protection measures to gain SEC approval.”
Jiang Zhaosheng pointed out, “The fundamental reason Wall Street institutions are gradually expanding their layout in the cryptocurrency field is to meet the investment needs of more investors, especially institutional investors. It can be anticipated that including virtual asset ETFs like ETH will not bring as much widespread market attention and massive fund inflows as BTC ETFs did. However, the emergence of more virtual asset ETFs is beneficial for both the crypto market and traditional financial markets, indicating an accelerating convergence of two previously incompatible financial systems.”
Solana: Ethereum Killer?
Reflecting on the development of the cryptocurrency market, despite fluctuations in Bitcoin prices, Ethereum has maintained a dominant position in the public chain sector. Now, with Solana gaining favor from Wall Street institutions, attention is also focused on whether it can disrupt Ethereum’s position.
“The narrative logic of the public chain race has changed, with few public chain projects targeting Ethereum’s replacement gaining market favor,” Jiang Zhaosheng commented. “If we only consider the present, Solana may indeed be Ethereum’s most significant technological challenger. However, in the longer term, Solana is actually filling the technical and application gaps of Ethereum in adapting to the Web2 finance market, thereby accelerating the breakout and large-scale adoption of Web3 technology. From this perspective, Solana may be more of a disruptor of Web3 rather than Ethereum.”
Public information shows that Solana was founded by Anatoly Yakovenko and Raj Gokal in 2018 and launched in 2020 as a proof-of-stake blockchain designed for high performance and large-scale adoption.
As a competitor to Ethereum, Solana offers a more competitive solution in blockchain scalability, performance, and cost efficiency. Solana provides extremely low transaction fees, making it the preferred choice for many users and developers. Additionally, Solana boasts exceptional processing capabilities. With its unique Proof of History (PoH) and Proof of Stake (PoS) hybrid consensus mechanism, Solana far surpasses Ethereum in transaction speed, capable of processing thousands to even 60,000 transactions per second. In contrast, Ethereum has been criticized for its high Gas fees, and during network congestion periods, Ethereum can handle only about 30 transactions.
However, it’s important to note that Solana’s advantages come at the cost of sacrificing some decentralization conditions. Currently, operating a Solana node typically requires high-performance hardware infrastructure, resulting in high operating costs.
“Solana does indeed possess significant technological advantages that make it superior to Ethereum in certain aspects. However, becoming the king of public chains depends not only on technological advantages but also on the maturity of the ecosystem, the size of the developer community, the richness of applications, and market acceptance,” Yuan Jingning believes. “Ethereum has a more mature and larger ecosystem, with a far larger and more active developer community. Ethereum’s smart contract platform has become the basis for many blockchain applications, with a wide user base and developer support. These factors make Ethereum’s position difficult to shake in the short term.”
In Yuan Jingning’s view, the current development of public chains shows a trend towards diversification and specialization. Different public chain projects are exploring different technological paths and application scenarios, with future public chain competition focusing more on ecosystem construction and improving user experience. Platforms that can provide stable, secure, efficient, and widely applicable scenarios will stand out in competition. Meanwhile, the development of cross-chain technology may change the current competitive landscape of public chains, promoting cooperation and interoperability between different blockchains, further driving the overall development of the industry.
Gao Zelong, Vice President of the Beijing Consensus Blockchain Research Institute and Senior Researcher at the International Blockchain and Cryptocurrency Association, commented to Huaxia Times, “The development of public chains shows a trend of multi-chain coexistence. Different public chains serve different needs based on their technological characteristics and application scenarios. Chains like Solana, Avalanche, and Polygon demonstrate competitiveness in specific fields, while Ethereum maintains leadership in DeFi, NFT, and other areas.”
“In the long run, the development trend of public chains may enhance interoperability, smoother inter-chain communication, and differentiated development according to actual needs. Each public chain is exploring how to enhance transaction speed and reduce costs while ensuring security and decentralization, to attract more users and developers. Ultimately, the competition and cooperation between public chains will jointly promote the maturity and widespread application of blockchain technology,” Gao Zelong concluded.
Responsible Editor: Xu Yunqian
Chief Editor: Gong Peijia
