- Canary Capital filed for SEC approval to launch a Solana ($SOL) ETF yesterday, following in the footsteps of VanEck and 21Shares.
- The digital asset manager also eyes the launch of Ripple ($XRP) and Litecoin ($LTC) ETFs.
- Solana has witnessed a 380% price spike since last year. However, the future success of US-based $SOL ETFs remains uncertain.
Yesterday, Canary Capital joined the race for a $SOL ETF by filing for SEC approval.
The Nashville-based virtual asset manager is the third US company to initiate the launch of a $SOL ETF, hot on the heels of VanEck and 21Shares.
Such a move signals increased interest in helping investors trade shares that mirror Solana’s market price on the stock market – without the troubles associated with buying and managing the crypto directly.
$SOL Secures 5th Spot in Crypto Rankings
In the crypto arena, $SOL currently has the fifth largest market cap at ~$82B and is valued at ~$174.
Albeit not without fluctuations, its price has appreciated by an impressive ~380% since last year.
Canary Capital aims to capitalize on Solana’s fast-performance blockchain, low gas fees, and support for DeFi, dApps, and other Web3 innovations – each of which makes it a strong Ethereum competitor.
But although Solana’s Total Value Locked (TVL) currently stands at an impressive $6.259B, it’s a far cry from Ethereum’s $49.96B (nearly 700% greater).
Canary Capital Eyes Other US-Based ETFs
Canary Capital’s focus isn’t solely on $SOL. On October 8 and 15, the firm also filed for $XRP and $LTC ETFs. However, when considering Ripples’ ongoing battle against the SEC, the chances of the former ETF being accepted any time soon are slim.
Canary Capital’s ETF stance follows the US regulator’s approval of $BTC and $ETH ETFs in January and July, respectively.
Notably, BlackRock’s iShares Bitcoin Trust is currently the largest US spot $BTC ETF by net assets. On Wednesday, it registered a hefty $872M in inflows – its largest volume post-launch.
According to a Bloomberg analyst, $ETH ETFs (which have a net outflow of $500M) don’t garner the same interest as $BTC ETFs due to their complexity.
There have been significant inflows into Bitcoin ETFs. Some believe that a Trump victory would benefit Bitcoin, leading to increased demand in these ETFs.
James Seyffart talks about the skepticism around Bitcoin and the potential for greater acceptance https://t.co/T1vuvUbhXN pic.twitter.com/cUykfADlo6
— Bloomberg TV (@BloombergTV) October 30, 2024
Is America Ready for a $SOL ETF Breakthrough?
$SOL ETFs are more attractive than directly buying Solana on a crypto exchange because investors don’t need to set up a crypto wallet or oversee their private keys.
If approved by the SEC, they’ll be readily available on US platforms that regular traders use (stock exchanges). This will likely increase the coin’s demand and, therefore, its price.
According to Bloomberg ETF analyst Eric Balchunas, the SEC will accept the first US spot $SOL ETF around mid-March 2025.
However, given the lack of appetite for US-based $ETH ETFs, the future success of $SOL ones remains uncertain.
Brazil has notably already approved two spot $SOL ETFs. But the nation’s crypto regulations are much looser than those in the US (for now).
Trump’s threat about booting the SEC’s chairman, Gary Gensler (who’s got an unfavorable stance on crypto), if he wins the upcoming presidential election might also favor digital assets firms – like Canary Capital.
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