VanEck filed an S-1 registration statement with the SEC to launch a spot exchange-traded fund investing in Solana.
The price of SOL has rocketed by 5% in a matter of minutes after VanEck, an investment management firm commanding $89.5 billion in assets, applied to launch a spot Solana ETF.
On July 27, VanEck filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) to launch the VanEck Solana Trust — an exchange-traded fund (ETF) that would directly invest in and hold Solana (SOL).
“The Trust’s investment objective is to reflect the performance of the price of Solana (‘SOL’) less the expenses of the Trust’s operations,” the filing said.“In seeking to achieve its investment objective, the Trust will hold SOL and will value its Shares daily.”
Notably, VanEck explicitly stated it does not plan on staking any of the prospective fund’s underlying SOL.
“Neither the Trust nor the Sponsor, the SOL Custodian, or any other person associated with the Trust will, directly or indirectly, engage in any action where any portion of the Trust’s SOL is used to earn staking rewards, to earn additional SOL or to generate income or other earnings.”
The price of SOL is up 6% in one hour, according to The Defiant’s crypto price feeds.
Commodity or security?
While many onlookers have suggested that Solana may be a worthy candidate to become the third cryptocurrency to underpin a spot ETF, some analysts have argued that the SEC’s recent efforts to classify SOL as a security likely undermine its chances.
Last year, the SEC described SOL as an unregistered security asset in both of its lawsuits against Coinbase and Kraken, two top U.S-based exchanges.
“SEC isn’t dancing around SOL’s status like they have ETH,” tweeted James Seyffart, an ETF analyst at Bloomberg. “Those lawsuits against COIN and Kraken and others flat out say ‘Solana is a security’.”
By contrast, Bitcoin and Ethereum, cryptocurrencies for which the SEC has approved the launch of spot ETFs, were both found to be sufficiently decentralized to comprise commodity assets by the SEC in 2018.
However, Matthew Sigel, head of digital assets research at VanEck, argued that he believes SOL is a commodity asset.
“We believe the native token, SOL, functions similarly to other digital commodities such as Bitcoin and ETH,” Sigel tweeted. “It is utilized to pay for transaction fees and computational services on the blockchain. Like Ether on the Ethereum network… the broad range of applications and services supported by the Solana ecosystem… underscores SOL’s utility and value as a digital commodity.”
“No single intermediary or entity operates or controls the Solana network, a principle referred to as decentralization,” Sigel continued. “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.
However, the SEC also noted the existence of regulated futures products tracking Bitcoin and Ethereum when approving said ETFs, emphasizing that the products’ shares have demonstrated a strong correlation to the spot market prices of BTC and ETH.
No regulated Solana futures products are currently trading in the United States.
Spot Ether ETFs loom
The news comes after the SEC gave preliminary approval to spot Ethereum ETF applicants last month, and is expected to give a final greenlight to the funds’ S-1 registration statements by the end of Summer.
On July 26, Reuters reported that spot Ether ETFs could enter the market as soon as the first week of July.
Citing two anonymous “industry executives,” Reuters said the SEC is only requesting “minor… finishing touches” to applicants’ filings at this stage, meaning final approval is “probably not more than a week or two away”
Eric Balchunas, an ETF analyst at Bloomberg, tweeted that he is optimistic about the July 2 timeline.
“VanEck just filed an 8-A form for spot ETH, which is part of the process,” he said. “Notably, they filed their 8-A for spot Bitcoin exactly seven days before its launch. This is a good sign for our July 2 prediction.”
The SEC also allowed spot Bitcoin ETFs to begin trading in January. The second has since attracted cumulative inflows of $14.5 billion, according to Sosovalue.
Galaxy Research, a major digital asset analysis firm, predicts that spot Ether ETFs could attract $1 billion in net monthly inflows once trading begins.
“We expect the net inflows into ETH ETFs to be 20-50% of the net inflows into BTC ETFs over the first five months, with 30% as our target, implying $1 billion/month of net inflows,” said Charles Yu, an analyst at Galaxy Research.
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