SEC Unlikely to Approve in 2024

According to recent revelations, the odds of the US SEC (Securities and Exchange Commission) approving a Solana ETF (exchange-traded fund) anytime soon have diminished significantly.

Fox Business correspondent Eleanor Terrett reported that the SEC has already notified at least two of the five firms filing for Solana spot ETFs that their applications would be rejected.

Solana ETF Approval Chances  are Extremely Low

According to Terrett, the SEC has notified at least two of the five prospective issuers that it will reject their 19b-4 filings for the SOL spot ETFs.

“The consensus here, I’m told, is that the SEC won’t entertain any new crypto ETFs under the current administration,” Terrett wrote.

This development comes as a sharp reversal from earlier optimism. Just days ago, reports suggested that negotiations for Solana ETFs were progressing well and that approval could be within reach.

However, the SEC’s latest signals suggest that the regulatory agency remains hesitant to expand crypto-related ETFs beyond Bitcoin and Ethereum, the only digital asset ETFs currently approved in the US.

Solana is among several altcoins whose ETF applications remain in limbo. Alongside Solana, applications for XRP, HBAR, and Litecoin ETFs are also under review.

Filing a 19b-4 form, which sets the timeline for the SEC’s review process, is a crucial step in this journey. However, Bloomberg Intelligence’s James Seyffart pointed out that several applicants have not reached this stage, as indicated by deadlines marked “N/A.”

Bitwise, Canary Capital, and Grayscale recently made headlines with their Solana ETF filings. Meanwhile, VanEck and 21Shares collaborated on a submission to Cboe, signaling widespread institutional interest in the Solana ecosystem.

Despite this momentum, a lack of regulatory clarity continues to weigh on the market, with Solana ETF approval odds reportedly plummeting to just 3% three months ago.

Many view a SOL-based ETF as a natural next step in Solana’s maturation, enabling broader investor access and liquidity. The SEC’s stringent stance, however, reflects the challenges of achieving this milestone under the current regulatory framework. With numerous applications already rejected or pending without clear timelines, the Solana ETF debate exemplifies the broader struggle between innovation and oversight in the crypto industry.

Political and Regulatory Shifts Could Change Things

The SEC’s resistance to broadening crypto ETF approvals reflects the current administration’s cautious approach to digital assets, spearheaded by Chair Gary Gensler. However, political and leadership changes could shift this dynamic.

President-elect Donald Trump has expressed a pro-crypto stance that some experts believe could pave the way for more accommodating policies. Analysts suggest a Trump administration might foster a more favorable regulatory environment for digital assets, especially with a crypto-friendly SEC chair like Paul Atkins.

This change could reignite optimism for Solana and other altcoin ETFs that are currently stalled.

“The greatest Solana win coming from the new Trump Presidency will be our long-awaited ETF in 2025 or 2026. No surprise, the incredible VanEck team will lead the charge here with support from 21Shares and Canary Capital,” said Dan Jablonski, head of growth at news and research firm Syndica.

Despite regulatory hurdles, Solana continues to demonstrate strong ecosystem growth. As of this writing, SOL is trading for $239.47, a modest 1.37% gain on the day. The blockchain is celebrated for its high throughput and low transaction costs, which have attracted institutional interest.

Following the appointment of a new SEC chair ahead of Gensler’s resignation and as Trump’s inauguration nears, the potential for significant regulatory shifts looms large. These developments could usher in a new era of crypto acceptance, opening doors for Solana and other altcoin ETFs. Until then, however, the path to approval remains fraught with uncertainty.