The approval of spot Ether ETFs has set the stage for other altcoin ETFs, with Solana, XRP, Chainlink, and Dogecoin being potential candidates. However, the approval of these ETFs might hinge on political shifts following the 2024 U.S. presidential election.
The SEC’s Stance on Altcoin ETFs
Despite the U.S. Securities and Exchange Commission (SEC) recently approving spot Ether ETFs, the path to other altcoin ETFs remains uncertain. SEC Chair Gary Gensler has stated that the launch of Ether ETFs will take time. This cautious approach has not stopped the crypto market from speculating that Solana could be next in line.
Ophelia Snyder, co-founder and president of 21.co, a sponsor and sub-adviser for ARK Invest’s spot Ether ETF, remarked, “It’s unlikely that the approval of ETH will result in a large wave of approvals.” However, the high demand for Bitcoin and Ether ETFs from institutional investors could encourage more filings for altcoin ETFs.
Also Read: Thailand SEC Approves First Bitcoin ETF, Targeting Wealthy Investors
Institutional Interest in Altcoins
According to an April report by CoinShares, hedge funds and wealth managers have significantly increased their holdings in altcoins, particularly Solana. This growing interest underscores the potential for a Solana ETF.
Snyder highlighted the success of 21.co’s Solana exchange-traded product (ETP) on European exchanges, which manages nearly $990 million in assets. This level of institutional investment reflects a strong market appetite for Solana-related financial products.
Challenges Ahead
Despite the enthusiasm, the SEC has not indicated any readiness to approve additional cryptocurrencies for future ETFs. The approval of spot Ether ETFs was already a significant challenge for the commission, making the path for an altcoin ETF even more daunting. Nevertheless, political changes, market demand, and institutional interest could influence the SEC’s stance.
