BlackRock Holds Off on Solana (SOL) ETF, What’s Next for Smaller Altcoins?
BlackRock recently confirmed its decision not to launch a Solana (SOL) ETF in the near future, despite the success of its Bitcoin and Ethereum spot ETFs this year. This move opens up opportunities for other asset managers to explore this area, with some already making moves to introduce similar products.
BlackRock’s Stance on a Solana ETF
Samara Cohen, the Chief Investment Officer at BlackRock, revealed in an interview with Bloomberg that the company has no immediate plans to launch a Solana ETF. Cohen emphasized the importance of investability and meeting the criteria for an ETF. She noted that while Bitcoin and Ethereum meet these standards, it may take some time before other assets like Solana are considered.
- BlackRock’s iShares Bitcoin Trust (IBIT) has attracted close to $20 billion in flows since its launch in January, making it one of the most successful ETFs in history.
- The Ethereum ETF by BlackRock has also gained significant traction, with approximately $440 million in ETH under management.
Despite the success of Bitcoin and Ethereum ETFs, the case for a Solana ETF remains uncertain.
Robert Mitchnick, BlackRock’s Head of Digital Assets, highlighted that Solana’s market cap is still relatively small compared to Bitcoin and Ethereum. He mentioned that Solana lacks the maturity, liquidity, and track record to be considered a viable investment asset at the moment.
Earlier this year, Mitchnick reiterated that Bitcoin was still the preferred choice for most crypto investors, followed by Ethereum, with other assets attracting minimal interest.
Potential for a Solana ETF
In a groundbreaking move, VanEck was the first company to file for a Solana spot ETF in the US back in late June. VanEck argued that regulators should approve their request based on the similarities between SOL, BTC, and ETH as digital commodities.
- Vaneck’s head of digital asset research, Matthew Sigel, compared SOL to Ether on the Ethereum network, highlighting its use in digital asset platforms and peer-to-peer transactions.
- However, unlike Bitcoin and Ethereum, Solana does not have a futures market on the CME, a key factor in approving Bitcoin spot ETFs.
The debate continues over whether SOL should be classified as a security token, with the SEC raising concerns in its lawsuit against Coinbase.
Conclusion
While BlackRock has decided to hold off on a Solana ETF for now, the industry remains dynamic as other asset managers explore similar opportunities. The success of Bitcoin and Ethereum ETFs has set a precedent, prompting discussions around the potential for new ETFs with different altcoins.
It will be interesting to see how regulatory bodies respond to requests for additional ETFs in the crypto space and whether newer assets like Solana can meet the criteria set by major investment firms.
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