TLDR
- SEC now has 240 days (until October) to review spot Solana ETF filings from VanEck, 21shares, Bitwise, Canary Capital, and Grayscale
- Bloomberg analysts give Solana ETFs 70% approval odds, with potential for higher odds if security-related lawsuits are resolved
- Solana’s network earned $750 million in fees in 2024, ranking third behind Bitcoin and Ethereum
- XRP and HBAR have seen massive gains (426% and 400% respectively) since Trump’s re-election, driven by ETF applications
- Institutional investors are likely to remain cautious about alt-coin ETFs, with some experts suggesting only Solana and XRP might attract substantial assets
Five major financial firms have submitted applications for spot Solana exchange-traded funds (ETFs), marking a new phase in the expansion of cryptocurrency investment products. The Securities and Exchange Commission (SEC) officially added the filings from VanEck, 21shares, Bitwise, Canary Capital, and Grayscale to the Federal Register in February 2025.
The regulatory body now has 240 days to make decisions on these applications, setting up a potential approval date in October 2025. Grayscale’s filing was added to the register on February 12, while the other four applications were acknowledged on February 11.
Bloomberg ETF analysts Eric Balchunas and James Seyffart have given the Solana ETF applications a 70% chance of approval. These odds could improve if current lawsuits questioning Solana’s status as a security are resolved, particularly given the SEC’s recent trend of reducing legal actions against crypto companies.
The timing of these applications comes as Solana has proven its technical capabilities in the market. The blockchain network collected $750 million in fees during 2024, placing it third in revenue behind only Bitcoin and Ethereum. This performance shows real-world usage of the network, which could factor into the SEC’s review process.
The push for new crypto ETFs extends beyond Solana. Applications have been filed for funds tracking XRP, Hedera (HBAR), Litecoin (LTC), Cardano (ADA), and Dogecoin (DOGE). These tokens have seen price increases since Donald Trump’s re-election, with XRP and HBAR leading the pack with gains of 426% and 400% respectively.
Expert Sentiment Divided
However, market experts caution that institutional investors may approach these new ETF products with care. While retail investors showed strong interest in Bitcoin and Ethereum ETFs, which have attracted $121 billion and $8.7 billion respectively, traditional investment firms typically require lengthy due diligence processes for new products.
Canary Capital has also announced plans for an Axelar (AXL) trust, adding another layer to the growing crypto investment landscape. The trust will offer institutional and accredited investors exposure to AXL, with Coinbase serving as the designated custodian.
The market performance of these tokens varies widely. Despite recent gains, many remain well below their all-time highs from the COVID-19 period. Excluding Solana, these tokens average 65% below their peak values.
Solana itself has faced challenges, including a recent 42% year-to-date decline following issues with the LIBRA memecoin, which was promoted by Argentinian President Javier Milei. However, the network’s technical performance and fee revenue suggest underlying strength in its ecosystem.
Ryan Rasmussen from Bitwise Asset Management, one of the ETF applicants, suggests that investors in these projects are betting on the future impact of blockchain technology rather than current valuations or revenue streams.
The regulatory landscape for crypto ETFs has evolved since the approval of Bitcoin spot ETFs. The SEC’s approach to these new applications may be influenced by the performance and market response to the Bitcoin products.
For XRP specifically, any ETF approval would need to wait for the resolution of ongoing legal matters between Ripple Labs and the SEC. The timeline for this resolution remains unclear but could impact the broader approval process for crypto ETFs.
Early 2025 data shows Axelar ranking as the 11th largest blockchain by total value locked (TVL), exceeding $1 billion. The platform continues to expand its connections with other networks including XRP Ledger, Hedera, Stellar, Sui, Solana, and Bitcoin.
Traditional investment advisors remain divided on the potential of these new ETF products. Some suggest that while Solana and XRP might attract substantial assets, other tokens may struggle to gain institutional support.
Bloomberg’s James Seyffart notes that interest in most alternative cryptocurrencies appears limited compared to Bitcoin and Ethereum, potentially affecting the success of their ETF products.
