As a seasoned crypto investor with a keen interest in altcoins, I find the latest news about VanEck’s plans to debut an exchange-traded investment product based on Solana (SOL) token quite intriguing. The price surge we’ve seen in SOL since the filing is undeniable, and it’s not hard to see why this altcoin has caught the attention of traditional financial institutions.
An influential asset management company, VanEck headquartered in New York, announced intentions to launch a new exchange-traded product tracking the price movements of the Solana (SOL) token. Remarkably, following this filing, the altcoin experienced its most significant price surge within the previous 30-day period.
According to a Bloomberg report, VanEck submitted an application to the Securities and Exchange Commission (SEC) on Thursday for a Solana investment product named the VanEck Solana Trust. Noteworthy is that this trust will directly own the SOL token, making VanEck the pioneer in holding an altcoin through such a vehicle.
As an analyst, I’ve noticed that the classification of cryptocurrencies other than Bitcoin (BTC) as securities or decentralized communities remains unclear. The Securities and Exchange Commission (SEC) has yet to declare its stance on Ethereum‘s native token, Ether (ETH). However, there are rumors suggesting that the SEC could approve S-1 filings for spot ETH exchange-traded funds (ETFs) by July 4. This potential approval has sparked optimism within the industry regarding the possibility of altcoin ETFs.
Last year, Solana secured a spot among the top three cryptocurrencies not due to a dramatic price increase alone, but mainly because it was the busiest token in the decentralized web (Web3), according to Rich Rosenblum, the co-CEO of digital-asset firm GSR.
It’s intriguing to note that after record-breaking net inflows of $14.45 billion for Bitcoin spot ETFs in the US as of June 27 (according to SoSoValue), ETF issuers are now exploring opportunities to create products linked to other digital assets, such as Solana. However, it’s important to remember that a regulatory filing does not automatically lead to SEC approval for an ETF tied to Solana, despite its position as the fifth largest digital asset by market capitalization.
According to Bloomberg’s analysis by James Seyffart, the SEC has taken over a decade to approve a Bitcoin ETF, and if they consider an Ethereum (SOL) ETF, it’s unlikely that approval will be granted before 2025. However, the elections in the United States presidential year 2024 could potentially influence the timeline of approval.
Matthew Sigel, VanEck’s head of digital-asset research, expressed his viewpoint on social media platform X that Solana should be classified as a commodity, similar to Bitcoin and Ether. He explained that Solana is used for transaction fees and computational services on its blockchain, just like Ethereum uses ETH. Consequently, SOL can be traded on digital-asset platforms or employed in peer-to-peer transactions.
“Sigel expressed his conviction that Solana’s decentralized structure, practical uses, and affordable economics make it a potential valuable asset, reminiscent of other well-established digital currencies. This belief is based on its suitability for investors, developers, and business owners seeking options beyond the dominant app marketplaces.”
SOL Price Surge
At present, the value of a SOL token has increased by approximately 6% and is priced at $144.16. Additionally, the trading volume for this altcoin has significantly surged by around 111.37%, reaching a total of $3.11 billion. With these transactions, the market capitalization of SOL stands tall at an impressive $66.6 billion.
Over the last week, I’ve observed a 8.41% price increase for SOL. However, there’s been a substantial 13.52% decrease over the past month. Despite this recent volatility, SOL’s price has experienced a remarkable surge since June 2023, rising by an impressive 787.86%. According to Bloomberg’s data, the token underwent a staggering 900% growth in 2023.
Significantly, the value of this cryptocurrency has decreased by over forty-four percent since it reached an all-time peak of $260.06 three years ago in November 2021. A potential approval for a Solana Exchange-Traded Fund (ETF) could potentially lead to the price revisiting previous highs.
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2024-06-28 10:09