New American asset manager Canary Capital has filed with the U.S. Securities and Exchange Commission (SEC) as it plans to launch a spot Solana exchange traded fund (ETF). Canary is now seeking to launch spot XRP and Litecoin ETFs, following two previous filings to open spot cryptocurrency ETFs.
Approved, the proposed Canary Solana ETF would enable investors to buy exposure to Solana (SOL) without the need to buy, sell, or store cryptocurrency a low risk means to enter the digital asset market. The file for the Solana ETF from Canary runs amuck with similar filings earlier this year from asset management heavyweights, including VanEck and 21Shares.
Solana’s Blockchain Powers Decentralized Applications and Finance Platforms
They are part of what some are dubbing the new wave of asset managers looking to offer institutional grade cryptocurrency investment options. They hope to connect traditional finance with the fast evolving world of digital coins by allowing investors to invest in SOL, a regulated asset. The cryptocurrency of the future is Solana, and SOL is very strong in the cryptocurrency ecosystem.
SOL is currently the fifth largest digital asset, having risen 400% in value in the last year with a current price of around $175 and a $82 billion market cap. To put it plainly, Solana’s blockchain is very good at running decentralized applications (dapps), decentralized finance (DeFi) platforms, and meme coins. Many look at SOL as a formidable rival to Ethereum, owing to its low fees and ultrafast transactions that are well-suited to some high-demand DeFi apps.
Solana’s ecosystem, Canary says, shows high network performance according to metrics, including daily transactions, active and new addresses, and stable fees. In a statement last month, Canary said that SOL has become a ‘battle-tested front runner’ for decentralized applications and that additional growth in on-chain stablecoin deployment could further establish a lead for the blockchain over other blockchain networks.
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One reason Canary and other asset managers are finding interest in offering SOL through an ETF is this level of activity and stability. Historically, the SEC has reacted in a cautious way to cryptocurrency based ETFs. Finally, in January 2024 the regulatory body approved Bitcoin ETFs, and then Ethereum ETFs in July.
SEC’s Cautious Approach Complicates Solana ETF Approval Process
While it has obtained approvals from the SEC, the SEC has been cautious as Chair Gary Gensler frequently speaks out about potential securities law violations in the cryptocurrency space. The SEC’s attitude toward SOL, in particular, has been problematic. SOL has been suggested by the commission as an unregistered security that complicates regulatory terrain for approval of ETFs having the asset.
Yet some analysts remain hopeful that approvals of Bitcoin and Ethereum ETFs could open the door for a broader shift at the SEC, which could eventually open the door for SOL ETFs. Newly formed asset manager Canary Capital hopes to be a leader in digital asset management by offering regulated crypto trading solutions. One way that Canary is trying to meet institutional demand for crypto exposure in a regulatory bound was its recent Solana ETF application.
A victory for the firm and market would be a milestone, but analysts say the timeline could depend on outcomes of the U.S. election and changes at the SEC. Many are hopeful that the SEC review of applications from Canary, VanEck, and 21Shares will help push efforts to blend digital assets with mainstream finance by approving SOL ETF.
Conclusion
The Solana ETF from Canary Capital, which is waiting for SEC approval, joins VanEck and 21Shares’ push to bring regulated crypto options to the wider world of finance. If this passes, approval could be a game changer, expanding market access to Solana and cementing Solana as one of the only three asset classes such as Bitcoin and Ethereum investment-grade digital assets.
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