Brian Kelly Predicts Solana Could Be Next in Line for ETF Approval
BKCM CEO Brian Kelly recently predicted on CNBC’s “Fast Money” that Solana (SOL) could be the next cryptocurrency to receive a spot exchange-traded fund (ETF) in the United States. Kelly made this prediction amidst growing interest in cryptocurrencies and while awaiting the SEC’s decision on proposed spot Ether ETFs.
Brian Kelly’s Key Points
- Kelly mentioned that Solana is gaining prominence alongside Bitcoin (BTC) and Ethereum (ETH) as one of the top cryptocurrencies for the current market cycle.
- However, industry experts were quick to challenge Kelly’s bold assertion due to significant regulatory and market obstacles.
The Security and Exchange Commission (SEC) has categorized Solana as a security, which has led to lawsuits against major exchanges like Coinbase and Kraken. This classification poses a obstacle to its approval. Furthermore:
- Unlike Bitcoin and Ethereum, which do not yet have spot ETFs but do have futures ETFs, Solana lacks this important market infrastructure.
- Financial analyst James Seyffart from Bloomberg Intelligence emphasized the need for a Solana futures product listed on the Chicago Mercantile Exchange or a comprehensive cryptocurrency regulatory framework from Congress before a spot ETF can be considered.
Current Status and Future Prospects
- Bitcoin and Ether are the only cryptocurrencies with approved futures ETFs in the U.S.
- Major ETF issuers have shown limited interest in launching ETFs for other cryptocurrencies beyond Bitcoin and Ethereum.
Despite regulatory hurdles, there is a noticeable demand for a Solana ETF. Several experts believe that investors, aside from those interested in Bitcoin and Ether, are eager for a Solana ETF. Nonetheless, the challenges in regulations may lengthen the process significantly.
- Nate Geraci, president of The ETF Store, echoed Seyffart’s views that a spot Solana ETF would unlikely be approved without a futures market and clearer regulations.
- Geraci emphasized the need for Congress to establish a solid regulatory framework for cryptocurrencies before any new ETFs can be approved.
Contrarian Views
- Despite Kelly’s prediction, some experts hold a different opinion. Adam Cochran from Cinneamhain Ventures suggested that Litecoin (LTC) or Dogecoin (DOGE) may have simpler regulatory paths to ETF approval.
- Both Litecoin and Dogecoin operate on a proof-of-work consensus, similar to Bitcoin, potentially easing their regulatory journey.
The regulatory environment is ever-changing, and the SEC’s stance could evolve with ongoing regulations. The verdict on spot Ether ETFs might set a precedent for approving ETFs for other digital assets, including Solana.
Hot Take: What Lies Ahead for Solana?
The road to a Solana spot ETF is filled with challenges, primarily regulatory obstacles that need to be addressed. While Brian Kelly’s prediction sparked speculation, the future remains uncertain. As the crypto industry continues to evolve, only time will tell if Solana will be the next cryptocurrency to obtain ETF approval in the United States.
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