The competition to launch the first U.S.-based Solana (SOL) exchange-traded fund (ETF) is heating up, with Bitwise joining the fray. The cryptocurrency investment firm filed an application with the Securities and Exchange Commission (SEC) on Thursday, becoming the fourth contender vying to offer a Solana ETF to American investors.
A Changing Regulatory Landscape
Bitwise’s move comes amidst a shifting regulatory environment, largely driven by the anticipated return of Donald Trump to the White House in January 2025. The prospect of a second Trump term has redefined expectations for the cryptocurrency sector, making once-distant regulatory proposals seem more plausible.
According to industry insiders, the current SEC Chairman, Gary Gensler, is expected to step down from the agency when Trump takes office. This leadership change could pave the way for more crypto-friendly policies, including the approval of ETFs tracking digital assets like Solana.
“The next return of Donald Trump to the White House has redefined expectations for the crypto sector, making once-distant regulatory proposals more plausible.”
– Crypto industry analyst
The Solana ETF Race
Bitwise is not alone in its pursuit of a Solana ETF. The firm joins a growing list of contenders, including:
- Canary Capital, which filed its application in October
- VanEck and 21Shares, the pioneers who kicked off the race in June
The intense competition reflects the growing interest in Solana as a hub for trading activity, particularly among memecoin traders. SOL, the native token of the Solana blockchain, has been one of the standout performers in this year’s crypto market rally, approaching all-time highs not seen since the peak of the last major bull run in late 2021.
Bitwise’s Crypto ETF Ambitions
Bitwise is no stranger to the crypto ETF space. The firm already offers a range of ETFs tracking Bitcoin (BTC) and Ethereum (ETH), the two crypto assets generally treated as commodities in the United States. Bitwise has also shown a propensity for filing applications on more controversial assets, such as XRP and now SOL.
“Bitwise markets aggressively to registered investment advisors in the United States. The firm reported $5 billion in assets under management last month.”
– Industry source
Matt Hougan, Bitwise’s Chief Investment Officer, confirmed the legitimacy of the SEC filing but declined to comment further. Cboe, Bitwise’s exchange partner for the proposed product, published 19b-4 forms for all four applications on Thursday.
The Road Ahead
As the race for the first U.S. Solana ETF intensifies, all eyes are on the SEC and the potential impact of the 2024 presidential election. A Trump victory could significantly boost the chances of approval for these innovative investment vehicles, opening up new opportunities for investors to gain exposure to the rapidly growing Solana ecosystem.
However, the road ahead is not without challenges. The SEC has historically been cautious about approving crypto ETFs, citing concerns over market manipulation and investor protection. It remains to be seen how the regulatory landscape will evolve and whether Bitwise or one of its competitors will emerge victorious in this high-stakes competition.
As the crypto industry continues to mature and attract mainstream attention, the launch of a Solana ETF could mark a significant milestone in the adoption and legitimization of digital assets. For now, investors and industry watchers alike will be closely monitoring the progress of Bitwise’s application and the broader regulatory environment as the battle for the first U.S. Solana ETF heats up.
