Solana's Potential ETF Approval Sparks Debate Among Crypto Analysts and Investors

Key Insights:

Investors'  prediction on Solana's potential ETF approval has stirred debate, coinciding with the SEC's Ether ETF decision.

Analysts believe Solana's advanced technology and expanding ecosystem as a strong candidate for future ETF offerings.

Regulatory progress and futures trading approval are essential for Solana's ETF emergence.

Brian Kelly, a leading crypto trader identified , recently made a prediction that has kept the crypto world in suspense.

During a talk show on the popular Fast Money CNBC segment on May 22, Kelly said that Solana could be the next crypto for approval of an exchange-based ETF in the United States.

This comes at a time when the Securities and Exchange Commission (SEC) is waiting to decide on the proposed spot Ether (ETH) ETF.

The Growing ETF Landscape

The crypto space is now eagerly waiting for the decision of the SEC regarding the spot Ether ETF which may result in the formation of the ETF for other currencies like Solana.

The perception given by Kelly has been deemed accurate or otherwise by enthusiasts of crypto and market analysts. Considering Solana’s technologically sound structure and expanding ecosystem, others predict that it will potentially become a new crypto asset for ETFs.

Nate Geraci – an influential crypto investment expert dismissed the likelihood of Solana ETF any time soon. According to him, such an ETF would not be approved unless Solana futures are admitted by the CME or until Congress creates a broad crypto regulation system. He continues and hints that the crypto ETF market will not budge after the expected Ether ETF approval.

Solana's Unique Appeal

James Seyffart, another prominent analyst, echoed this sentiment, suggesting that Solana would attract significant interest from investors, second only to Bitcoin and Ethereum.

This is because it has advanced technological features and various uses in the space, particularly in the DeFi and NFT markets.

Franklin Templeton’s Head of Digital and Industry Advisory Services, Sandy Kaul, highlighted Solana’s vision of creating a single atomic state machine.

It was claimed that this novel strategy helps decrease information asymmetry and optimize the result in decentralized blockchain networks.

Through its highlight in decentralized finance, meme coins, and non-fungible tokens, Solana proved that it has the capability of claiming its spot in the new era’s digital economy.

The Bigger Picture: Regulation and Market Dynamics

Thus, for a Solana ETF to emerge, there must be essential progress in the laws and markets regulating such products on the one hand and the adoption of seemingly innovative technologies on Solana on the other hand.

The purchase of Solana futures would have to be separately regulated by the Commodity Futures Trading Commission (CFTC), just like Bitcoin and Ethereum. Also, better legal frameworks like the Financial Innovation and Technology for the 21st Century Act (FIT21) could enhance legal automation of the approval process.

Citing data from exchanges and applications, Trezor has estimated that while about 420 million people use exchanges worldwide, only eight million use cold wallet applications for self-custody.

This indicates the future market share functionality for the ETF since it provides investors with exposure to cryptocurrencies without having to own them directly.