Bloomberg Analyst Predicts Next Move As SEC Rejects Solana ETF Filings

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As a seasoned researcher who has navigated through countless regulatory decisions and their impact on various financial markets, I find myself not entirely surprised by the SEC’s rejection of Solana spot ETF applications. Having witnessed Gary Gensler’s tenure at the helm of the SEC, it was apparent that a cautious approach to cryptocurrency ETFs would be the norm.

According to Bloomberg ETF analyst, Eric Balchunas, he’s offering perspectives in light of news that the United States Securities and Exchange Commission (SEC) declined applications for Solana-based spot exchange-traded funds (ETFs).

At least two companies hoping to issue securities were told by the SEC that their applications under Rule 19b-4 would not be accepted. This decision has caused a decrease in enthusiasm for Solana ETFs, as analysts speculate that changes may occur after new SEC leadership comes into power around early 2024.

Bloomberg Analyst  Stance On SEC Reject of Solana ETF

The Securities and Exchange Commission (SEC) is said to have informed at least half of the applicants for Solana spot ETFs about their decision, which appears to suggest that no approval has been given under the current administration. This development seems consistent with the regulatory approach often taken during Gary Gensler’s term as SEC Chair, as reported by Eric Balchunas of Bloomberg.

Experts in the field predict that the Securities and Exchange Commission (SEC) might not endorse fresh Cryptocurrency Exchange Traded Funds (ETFs) within the existing regulatory structure. Balchunas points out that this trend aligns with the SEC’s conservative stance on cryptocurrency ETFs, suggesting it as a continuation of their cautious approach.

“No surprise here. Crypto spot ETFs are on pause until new leadership steps in.”

In early 2023, some significant investment firms such as VanEck, 21Shares, and Canary Capital submitted applications for Solana ETFs. Experts suggest that these rejections indicate a wider hesitance on the part of the SEC to broaden ETF approvals beyond Bitcoin and Ethereum-related products.

Will New US SEC Chair Paul Atkins Fuel Approval?

Nowadays, crypto market enthusiasts are increasingly looking ahead to January 2024, as it’s anticipated that Paul Atkins will assume the role of SEC leadership then, having been nominated by President-elect Donald Trump to replace Gensler. Atkins is generally perceived as more supportive towards cryptocurrency markets compared to his predecessor.

Balchunas proposes that companies may resubmit their Solana ETF applications following the leadership change, hoping for a more favorable regulatory climate. Essentially, he says they’re playing a game of patience. Precedent indicates that several crypto-based ETFs are frequently approved at the same time, as observed with Bitcoin ETF approvals.

As a researcher, I find myself echoing the views shared by industry heavyweights such as Nate Geraci, President of the ETF Store. He suggests that, given the current political climate, we may not witness any approvals for crypto ETFs until the new administration takes office. The existing leadership seems to be operating in a transitional phase, often referred to as “lame-duck mode.” Despite temporary setbacks, the hope for broad approval of crypto ETFs like Solana remains, keeping optimism alive among many of us in this field.

Solana Price Consolidates, Price To Rally?

The recent announcement of the SEC declining Solana ETF applications coincides with the ongoing consolidation of Solana’s native token, SOL, within a tight price band. Following a robust surge earlier in 2021, the value of SOL has been hovering around $240, encountering resistance at approximately $300.

Market experts are keeping a close eye on Solana’s progress as it continues to be supported by favorable opinions and increasing institutional attention.

It’s anticipated by some market analysts that Solana’s price might exceed its current limit as the overall crypto market gains strength. Yet, the absence of ETF approval could potentially hamper Solana’s short-term growth spurt.

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2024-12-07 00:38