The cryptocurrency market is set to witness a big development as Volatility Shares LLC is about to launch the first Solana futures ETFs. This will go live this Thursday, March 20, 2025, and will give traders new ways to invest in Solana without actually holding the asset. This is not just big for Solana but for the entire crypto ETF space. Industry insiders believe that the success of futures-based Solana ETFs could play a key role in the approval of a spot Solana ETF following the model set by Bitcoin and Ethereum ETFs.
According to an SEC filing, the two ETFs, Volatility Shares Solana ETF (SOLZ) and Volatility Shares 2X Solana ETF (SOLT) will offer different levels of Solana futures exposure:
– SOLZ tracks standard Solana futures for traditional exposure to the asset’s price.
– SOLT is a leveraged ETF that amplifies gains and losses based on Solana futures price.
Here are the fee structures:
– SOLZ: 0.95% annual management fee
– SOLT: 1.85% annual management fee
This comes as institutional demand for crypto investment products is rising, especially in the post-spot Bitcoin ETF era.
How Solana Futures ETFs Pave the Way for a Spot ETF
A key factor in the SEC’s decision-making process for spot crypto ETFs has been the existence of a regulated and liquid futures market. This was a major factor in approving spot Bitcoin ETFs in 2024 and later Ethereum spot ETFs.
Bloomberg Intelligence ETF analysts estimate a 75% chance that a spot Solana ETF will get approved by Q4 2025 if:
- Solana futures market shows sufficient liquidity and stability.
- Regulatory hurdles on altcoin classification are addressed.
- SEC leadership changes for the better.
Regulatory Model: Lessons from Bitcoin and Ethereum ETFs
The SEC initially rejected multiple spot Bitcoin ETFs, citing market manipulation and investor protection. However, after the futures-based Bitcoin ETF market matured, the SEC approved multiple spot Bitcoin ETFs in 2024.
Ethereum followed a similar path, futures ETFs launched before spot approval. Solana futures ETFs could follow the same path, making the case for spot Solana ETF approval stronger.
According to James Seyffart, ETF analyst at Bloomberg Intelligence, the SEC’s stance is that futures-based ETFs provide a safer, regulated environment for price discovery, which is why they tend to get approved before their spot counterparts.
“The SEC has consistently required a well-established futures market before approving a spot ETF. With Solana futures ETFs launching, we’re one step closer to seeing spot Solana ETFs approved.”
Why Solana? A Crypto Rising Star
At $68.39B, Solana is the 6th largest cryptocurrency. With a high-speed blockchain and low fees, it’s a strong competitor to Ethereum and attracting institutional interest.
Solana went up 6% in the last 24 hours, mirroring the rest of the market. Some attribute this to the renewed optimism and institutional inflows from ETFs.
Grayscale, VanEck and Franklin Templeton have already filed for a Solana ETF. But approval might not come till after the SEC leadership shift.
With its efficient architecture, Solana is getting institutional interest, making the case for regulated products like ETFs stronger.
What’s Next for Solana ETFs?
One of the biggest factors holding back crypto regulation is the confirmation of Paul Atkins as SEC chair.
Atkins, a former SEC commissioner, has been nominated by President Donald Trump to lead the regulator, but his confirmation hearing has not been scheduled.
If confirmed, Atkins could shift the SEC’s stance on crypto ETFs and accelerate the approval of a Solana ETF.
“Crypto regulation is evolving and with the right leadership at the SEC we could see a more pro-innovation approach that allows for products like Solana ETFs,” said Eric Balchunas, ETF expert at Bloomberg.
Wrapping Up: A New Crypto ETF Era?
Solana futures ETFs could have big impacts for the crypto industry. If these ‘ETFs trade well, it could open the door for other altcoin ETFs including: Polygon (MATIC) ETFs; Avalanche ‘(AVAX) ETFs; Cardano (ADA) ETFs.
As institutional adoption grows, crypto ‘ETFs will become a normal financial product, and digital assets will become more part of the traditional investment landscape.
Stay updated with Deythere as we’re available around the clock, providing you with updated information about the state of the crypto world.
FAQs
1. What is the Volatility Shares Solana ETF (SOLZ)?
SOLZ is a futures ETF that tracks the price of Solana futures, not the underlying Solana (SOL).
2. How does the leveraged Solana ETF (SOLT) work?
SOLT is a 2X leveraged ETF to the Solana futures market, meaning gains/losses are amplified compared to regular futures trading.
3. Why is the launch of Solana futures ETFs important?
A regulated Solana futures market means a spot Solana ETF is more likely, just like Bitcoin and Ethereum.
4. When will a Solana ETF be approved?
Some experts think there’s a 75% chance of approval by Q4 2025 depending on regulations.
5. What are the fees for Solana ETFs?
– SOLZ (standard futures ETF): 0.95%
– SOLT (leveraged ETF): 1.85%
Glossary
Spot ETF: An ETF that holds the actual underlying asset (e.g., Bitcoin, Solana) rather than derivatives.
Futures ETF: An ETF that tracks futures contracts instead of directly holding the asset.
Leveraged ETF: An ETF that multiplies the exposure to the asset’s price movements, so both gains and losses are greater.
Market Manipulation: Actions that pump or dump an asset’s price, a no-no for regulators.
Liquidity: How easy is it to ‘buy or sell without moving the price.
References
Disclaimer
This is for informational purposes only and not ‘financial or investment advice. Cryptocurrency investments are risky. Always do your own research or consult with a financial advisor before making investment decisions.
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