SOL Jumps 6% after VanEck Files for Solana-based Fund

UTC by Anisha Pandey · 3 min read
SOL Jumps 6% after VanEck Files for Solana-based Fund
Photo: Depositphotos

A filing does not guarantee that the SEC would approve such a product that is tied to Solana, despite SOL being the fifth largest digital asset by market capitalization. 

VanEck, a leading asset management firm based in New York, revealed plans to debut an exchange-traded investment product based on the price action of the Solana (SOL) token. Notably, following the filing submitted by the ETF issuer, the price of the altcoin printed its biggest rally in the past 30 days.

As per a report from Bloomberg, VanEck filed for the Solana-based investment product with the Securities and Exchange Commission (SEC) on Thursday and seeks to debut the VanEck Solana Trust. It is important to note that the new product will hold the SOL token directly, as the filing read, with VanEck being the first firm to hold an altcoin.

Notably, the status of all cryptocurrencies, other than Bitcoin (BTC), as a security or a community, is unclear. The SEC has been silent on whether it officially considers Ether (ETH), the native token of the Ethereum blockchain, as a security. However, the agency might approve S-1 filings for spot ETH ETFs by July 4, as reported earlier by Coinspeaker. It seems that the industry players have become quite optimistic regarding altcoin ETFs with the approval of spot ETH ETFs.

“Solana solidified its place in the ‘Big 3’ last year, not by virtue of its parabolic rise in price, but rather as the most utilized token in Web3,” said Rich Rosenblum, co-CEO of digital-asset firm GSR.

Interestingly, following the success of spot Bitcoin ETFs in the United States, which have total net inflows worth $14.45 billion as of June 27 as per SoSoValue, the ETF issuers are looking for ways to provide products tied to other digital assets. On the other hand, a filing does not guarantee that the SEC would approve such a product that is tied to Solana, despite SOL being the fifth largest digital asset by market capitalization.

As noted by Bloomberg, it took the SEC more than a decade to release a spot Bitcoin ETF, and if the agency even considers a SOL ETF, approval cannot be expected before 2025, said Bloomberg Intelligence analyst James Seyffart. However, the timeline of approval can be affected by the upcoming 2024 United States presidential elections.

Matthew Sigel, the head of digital-asset research at VanEck, noted in a post on social media platform X that he considers Solana to be a commodity along with Bitcoin and Ether because “it is utilized to pay for transaction fees and computational services on the blockchain” and like ETH on the Ethereum blockchain, “SOL can be traded on digital-asset platforms or used in peer-to-peer transactions”.

“SOL’s decentralized nature, high utility, and economic feasibility align with the characteristics of other established digital commodities, reinforcing our belief that SOL may be a valuable commodity with use cases for investors, builders, and entrepreneurs looking for alternatives to the duopoly app stores,” Sigel said.

SOL Price Surge

The price of the SOL token is up around 6% at the time of writing, at $144.16, and the trading volume of the altcoin is up 111.37%, at $3.11 billion with a market capitalization of $66.6 billion.

In the past seven days, SOL’s price has been up 8.41% but is down by a significant 13.52% in the past 30 days. Nevertheless, since June 2023, the price of SOL has witnessed a surge of 787.86%, and as per the data compiled by Bloomberg, the token saw a 900% surge in 2023 alone.

Notably, the cryptocurrency is 44.43% lower from its all-time high of $260.06 witnessed three years ago in November 2021. It is possible for SOL to revisit its previous highs if a spot SOL ETF is approved.

Altcoin News, Cryptocurrency News, Funds & ETFs, Market News, News
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