VanEck Selects Solana for US-Based ETF, Citing Blockchain Decentralization, Compared to XRP
VanEck Selects Solana for US-Based ETF, Citing Blockchain Decentralization, Compared to XRP
- VanEck clarified that his decision to introduce comparable ETF products was motivated by the similarities between Ethereum (ETH) and Solana (SOL) in terms of their decentralized languages and blockchain features.
- VanEck thinks that XRP faces two primary obstacles, which are client demand and internal norms, which makes it unlikely to be considered for an ETF.
Cboe Exchange has verified that VanEck proposes to establish a Solana-based Exchange-Traded Fund (ETF) after completing a 19b-4 filing with the US Securities and Exchange Commission (SEC). It's interesting to note that after Ripple defeated the SEC in part last year, interest in a possible XRP ETF has also increased.
Regretfully, VanEck has not yet made any intentions official. Head of Digital Asset Research at VanEck Matthew Sigel explained that technicalities and legislation were the only factors that went into his choice to go with Solana over XRP.
In an interview with Thinking Crypto's Tony Edwards, Sigel said that the terms "decentralization" and "blockchain characteristics" used to both ETH and SOL are basically the same.
He asserts that no one entity can have more authority than
Sigel dispels the myth that there isn't a regulated futures market for solana.
Our recent examination of the GSR report revealed that having a long-standing, federally regulated futures market is one of the primary characteristics that qualifies the underlying commodity for ETF approval. Only Ethereum (ETH) and Bitcoin (BTC) are deemed eligible based on this evaluation.
Sigel commented on this and drew attention to the flaw in the evaluation, pointing out that not many ETFs are available on the market without a sizable futures market.
He stated that this precedent might make it easier for the first Solana ETF to receive US certification, but he did concede that approval might be simpler under a new SEC lead.
Frankly, we think that focusing on a regulated market of sufficient magnitude - the Futures Market – is a softer scope. Other exchange-traded funds (ETFs) are available in areas including uranium, shipping, and electricity where there are no sizable futures markets and where price formation is not influenced by themSigel stated that there are two barriers to XRP: client demand and internal conventions. This, in his opinion, makes XRP a less likely initiative to be taken seriously.
Regarding how ETF decisions are decided, Sigel noted that they have numerous stakeholders in it such as exchanges, market makers, custodians, etc. Which addresses difficulties through a complicated decision-making process. They then bide their time until the reference asset's regulations are clarified.
This will require clarification around the SOL ETF. Can we bring it to market? If not, I believe the issuers will try their hand at various proof of stake coins. Eventually, the pieces will fit together and someone will produce a top 3 or top 5 ETF.
