Solana, Cardano and other cryptocurrencies could be facing a prolonged wait for spot ETF approval in the United States, with experts suggesting they may struggle to attract investor interest even if they do get the green light.
Katalin Tischhauser, head of investment research at Sygnum Bank, has cast doubt on the prospects of altcoins following in the footsteps of Bitcoin and Ethereum in securing spot ETF listings. The primary hurdle, according to Tischhauser, is the lack of regulated trading venues for cryptocurrencies that meet the Securities and Exchange Commission’s (SEC) stringent surveillance requirements.
The SEC’s mandate is to safeguard investors from market manipulation and fraud. To fulfill this, the regulator closely monitors trading activity on regulated platforms like the Chicago Mercantile Exchange (CME). The availability of CME futures for Bitcoin and Ethereum was instrumental in their ETF approval.
However, crypto exchanges are currently viewed by the SEC as unregulated securities exchanges. Until this classification changes and platforms like Coinbase are accepted as surveillance markets, the approval of additional crypto ETFs seems unlikely.
Even if regulatory challenges are overcome, Tischhauser believes there may be limited demand for altcoin ETFs. While Bitcoin and Ethereum have established strong brand recognition, other cryptocurrencies like Solana have struggled to gain significant traction outside the crypto community.
The recent success of Bitcoin spot ETFs, attracting billions in inflows, stands in contrast to the tepid performance of Ether ETFs. This disparity highlights the market’s preference for established cryptocurrencies.
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The premium on Grayscale’s Solana Trust, while indicative of some interest, pales in comparison to its Bitcoin and Ethereum trusts, further emphasizing the limited overall demand for altcoin exposure.
These factors suggest that the path to ETF approval for Solana, Cardano, and other altcoins is fraught with challenges, and their ultimate success in the US market remains uncertain.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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