February 12, 2025
By Anjali Kochhar
The U.S. Securities and Exchange Commission (SEC) is actively reviewing multiple applications for Solana-based exchange-traded funds (ETFs), marking a potential turning point in the regulatory stance toward the cryptocurrency. The decision to review these filings is significant, as it suggests that Solana may no longer be classified as an unregistered security, a concern that has plagued the altcoin for years.
Solana has witnessed tremendous growth in recent months, with its economic value surging by 318%. This rapid rise in value has positioned Solana as an increasingly attractive investment option for both retail and institutional investors. If the SEC ultimately approves a Solana ETF, it could pave the way for significant institutional inflows, much like what was observed following the approval of Bitcoin spot ETFs in January 2024.
The acceptance of these applications marks a significant shift in the SEC’s stance, which has previously been hesitant to approve ETFs based on cryptocurrencies other than Bitcoin and Ethereum. This change is partly attributed to the recent re-election of President Donald Trump, who has shown support for digital assets and plans to establish the U.S. as a leading nation in the crypto space. The appointment of crypto-friendly figures in regulatory positions has further fueled optimism in the market.
Shivam Thakral, CEO of BuyUcoin, India’s second-longest-running digital asset exchange, commented on this development: “The markets are showing positive momentum, buoyed by the SEC’s notable step in acknowledging Grayscale’s amended application for a spot Solana ETF. This marks a shift, as the SEC previously rejected such filings. The decision to review the filing is particularly notable given its previous stance on SOL-based ETFs. This step may result from leadership change, opening the door for discussions that could redefine Solana’s status. Approval could attract significant institutional investment, potentially sparking an altcoin season and reshaping the future of the cryptocurrency ecosystem.”
Despite the optimism surrounding Solana ETFs, there remains a risk of rejection. If the SEC ultimately denies the applications, it could lead to heightened legal battles and increased regulatory scrutiny. Several cryptocurrency firms have previously sued the SEC over what they claim to be unfair regulatory practices, and a Solana ETF rejection could trigger similar actions.
Additionally, some experts warn that even if an ETF is approved, Solana could still face legal challenges regarding its classification. The SEC has historically taken an aggressive stance against altcoins, arguing that many of them qualify as securities under U.S. law. However, a successful ETF approval could signal a broader shift in how regulators view Solana and other blockchain projects.
The outcome of the Solana ETF applications could have significant implications for the broader altcoin market. If approved, it would set a precedent for other cryptocurrencies, such as Ethereum, Cardano, and even meme coins like Dogecoin, to seek similar ETF approvals. This could trigger an altcoin rally, as investors anticipate further institutional adoption.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
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