The wait for a Solana exchange-traded fund (ETF) in the US could hinge on the outcome of the upcoming presidential election, according to a senior Bloomberg ETF analyst. While the final deadline for the US Securities and Exchange Commission (SEC) to approve a Solana ETF isn’t until mid-March 2025, analyst Eric Balchunas suggests a much more critical date looms: November 2024, coinciding with the US presidential election.
Balchunas’ comments, shared on social media, highlight the potential impact of US politics on cryptocurrency regulation. He suggests that under a re-elected President Joe Biden, Solana ETFs are likely “dead on arrival” (DOA). Conversely, a victory for former President Donald Trump could pave the way for their approval.
This hinges on the contrasting stances of the two leading candidates towards cryptocurrencies. The Biden administration has adopted a cautious approach, with concerns raised by officials like Treasury Secretary Janet Yellen and SEC Chair Gary Gensler regarding potential fraud, market manipulation, and illicit activities. This has translated into increased scrutiny and regulatory actions impacting the crypto industry. Additionally, Biden recently vetoed a resolution aimed at reversing controversial SEC crypto rules.
On the other hand, Donald Trump, seeking re-election, has positioned himself as the “crypto president.” He promises to eliminate Biden’s anti-crypto policies, support bitcoin mining, and prevent the Federal Reserve from launching a central bank digital currency (CBDC).
The SEC’s approval of spot bitcoin ETFs in January 2024 marked a significant step towards integrating cryptocurrencies with traditional finance. Building on this, the commission is currently evaluating similar applications for ether ETFs. Eight spot ether ETFs have received 19b-4 form approvals, and the SEC collaborates with issuers to finalize S-1 filings, a crucial step before launch. Chair Gensler has even hinted at the potential debut of ether ETFs this summer.
The potential for Solana ETFs has attracted interest from asset managers. VanEck and 21Shares have submitted filings with the SEC to introduce Solana ETFs. Additionally, 3iQ Digital Asset Management, aiming to launch the first North American Solana exchange-traded product (ETP), disclosed a preliminary prospectus for an initial public offering in Canada.
While the mid-March 2025 deadline provides some leeway, the November election appears to be the critical turning point for Solana ETFs in the US. The contrasting stances of the leading presidential candidates on cryptocurrency regulation could significantly influence the SEC’s decision-making process. Investors with an interest in Solana ETFs should closely monitor the political landscape and regulatory developments surrounding cryptocurrencies in the coming months.
