Race For Spot Solana ETF Heats Up As Yet Another Firm Files Application With SEC

Canary Capital Group, a new digital asset-focused investment firm created by former Valkyrie Funds co-founder Steven McClurg, has become the latest investment firm to apply for a Solana-based exchange-traded fund (ETF).

Canary Capital joins a growing list of prestigious asset managers seeking to list a SOL ETF in the United States, including VanEck and 21Shares.

Canary Capital Pursues Spot Solana ETF

Despite Bitcoin (BTC) ETF leader Blackrock opting out of the Solana ETF race, some other firms are not shying away from filing to introduce an investment vehicle that would give investors exposure to SOL without having to purchase and store the cryptocurrency themselves.

According to an S-1 registration statement filed on Oct. 30, Canary Capital’s proposed spot SOL ETF would let traditional investors access the Solana market via brokerage accounts without the potential hurdles to entry or risks.

It’s worth mentioning that Canary Capital recently submitted S-1s for a spot XRP ETF on Oct. 8 and then a spot Litecoin ETF just seven days later on Oct. 15. With its latest filing, the firm has not named the custodian and administrator for the SOL ETF, nor did it say what ticker symbol the fund would be listed under.

SOL is currently the fifth-largest crypto on the market. The Solana blockchain is used for decentralized applications (dapps), decentralized finance (DeFi), and is home to a slew of meme coins. It’s considered a key competitor to Ethereum as it offers cost-effective and faster transactions.

“Despite the hyper-competitive L1 and EVM landscape, Solana has emerged as a battle-tested front-runner for decentralized applications,” Canary wrote in the statement. “Solana’s robust DeFi ecosystem has led to strong sustained on-chain analytics as measured by transactions per day, active addresses, and new addresses, while maintaining a low fee environment for all consumers. Future growth in native on-chain stablecoin deployment will also likely further accelerate the commanding lead Solana maintains over its peers.”

Solana has been considered the next digital asset to have a spot ETF greenlighted by the SEC, following Bitcoin and Ethereum approvals in January and July, respectively. 

Wen Solana ETF?

Solana ETF anticipation has spurred huge investor attention since VanEck submitted paperwork to launch the VanEck Solana Trust in June 2024. 21Shares followed VanEck’s lead, filing with the SEC to debut its own spot Solana ETF.

Asset manager Grayscale recently filed to convert a multi-asset fund into an ETF on the New York Stock Exchange, which features Solana exposure alongside Bitcoin, Ethereum, Ripple’s XRP, and Avalanche. These filings suggest a rising confidence in Solana’s potential among institutional investors.

Franklin Templeton is also eyeing a spot SOL ETF, though it has yet to file an application.

In the SEC’s pending lawsuits against digital asset exchanges like Coinbase, Kraken, and Binance, the agency claims that SOL satisfies the Howey Test, thus making it a security. Some industry insiders now think SOL ETFs have a near-zero chance of approval due to the SEC’s concerns over Solana’s classification as a security.

However, others believe that with BTC and ETH ETFs already trading on U.S. exchanges, making a logical case to deny Solana the same product is a steep uphill battle for the regulator.