Solana ETF Faces Slim Approval Chances in 2024, Analysts Predict

Wintermute CEO Evgeny Gaevoy has expressed skepticism regarding approving a Solana exchange-traded fund (ETF) this year. 

Gaevoy stated there is “near zero chance” for such approval, noting that any expectations for pro-crypto regulatory changes under a potential Donald Trump presidency are unrealistic.

This sentiment follows VanEck’s recent filing with the US Securities and Exchange Commission (SEC) on June 27, seeking approval for a spot Solana ETF. The filing has sparked speculation among some market analysts about a possible shift in the SEC’s stance toward digital assets, including Solana.

Analysts Caution on Solana ETF Optimism

Despite the filing, many analysts believe it is too early for a Solana ETF to gain approval. Bloomberg’s Senior ETF analyst Eric Balchunas suggested that changing US presidential leadership might lead to a more favorable regulatory environment under a pro-crypto SEC leader like Hester Peirce. 

Crypto lawyer Jake Chervinsky echoed this view, arguing that there is no legal or policy reason why Solana should not have an ETF similar to Bitcoin and Ethereum. However, Chervinsky speculated that the SEC might deny the application, citing Solana’s absence of a futures market as justification.

Crypto market maker GSR also speculated that a Trump presidency could usher in regulations facilitating the launch of spot crypto ETFs. Their report indicated that if regulations become more permissive, Solana would be among the following digital assets to receive regulatory approval this year.

Wintermute CEO doubts 2024 approval

Contrary to these speculations, Wintermute’s CEO, Evgeny Gaevoy, firmly believes that permissive regulations will not materialize this year. He argued that a Solana ETF is not feasible due to a lack of demand. Gaevoy emphasized that even approved Ethereum ETFs would struggle to attract significant inflows when they eventually list.

Gaevoy stated, “Once you see how little inflows there will be into ETH ETFs (this year), it will be clear how even less flows SOL ETFs would get even if it’s approved. And I’m saying this all while Wintermute is long for both SOL & ETH, so no fud, just being realistic here. Adoption takes time.”

Potential impact of Solana ETF on SOL price

Despite the skepticism, some crypto community members remain optimistic about the possibility of approval for Solana ETF soon. They note that the odds of Ethereum ETF approval were similarly low until shortly before the SEC’s unexpected decision to approve them. Pseudonymous crypto researcher Kwaker Oats pointed out that while an SOL ETF approval is not anticipated this year, the applications by asset managers indicate some level of demand, which is a positive sign.

Believers in Solana’s potential also dispute claims of insufficient demand for a Solana ETF. They highlight that Grayscale Solana Trust (GSOL) trades at a significant premium compared to SOL’s market price, suggesting strong investor interest.

GSR projected that approving a spot Solana ETF could potentially increase the asset’s price by up to 8.9 times its current value. Even in the worst-case scenario, the price is expected to double, at least if the ETF is approved. The report emphasized that Solana could outperform these estimates due to its higher upside potential than Bitcoin. GSR noted, “There are reasons to believe the impact could be higher than these estimates since, unlike BTC, SOL is actively used for staking and within decentralized applications.”

The long-term potential of Solana is also a point of optimism within the community. Some believe Solana’s price could reach as high as $1,000. 0xBorovik, a partner at crypto casino Rollbitcom, argued that such a price target is realistic given Solana’s growing ecosystem and use cases.

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