During a recent episode of CNBC’s “Fast Money” on May 22, crypto investor and show regular Brian Kelly proposed that Solana (SOL) might be the next cryptocurrency to secure a spot exchange-traded fund (ETF) in the United States. This statement came a day before the Securities and Exchange Commission (SEC) was scheduled to make a decision on at least one proposed spot Ether (ETH) ETF, fueling discussions about the future of cryptocurrency ETFs.
Kelly’s Perspective on Cryptocurrency ETFs
Kelly, who is also the founder and CEO of BKCM Digital Asset Fund, initiated the debate with his statement, “You’ve got to think about Solana as probably the next one. Bitcoin, Ethereum, and Solana are probably the big three for this cycle.” His comment set the stage for a broader discussion among market analysts and investors regarding which cryptocurrencies might follow Bitcoin and Ethereum in gaining ETF approval in the U.S.
The response to Kelly’s prediction was mixed among industry experts:
- Nate Geraci, President of The ETF Store: Geraci expressed skepticism, stating that a spot Solana ETF would unlikely materialize until a Solana futures product is traded on the Chicago Mercantile Exchange, or until a comprehensive regulatory framework for cryptocurrencies is established by Congress.
- James Seyffart, Bloomberg ETF Analyst: Seyffart agreed with Geraci, suggesting that such a development could take years, pending a market regulated by the Commodity Futures Trading Commission. He also noted that a spot Solana ETF would likely see significant demand, second only to Bitcoin and Ether.
- Adam Cochran, Partner at Cinneamhain Ventures: Cochran provided a contrarian perspective, suggesting that cryptocurrencies like Litecoin (LTC) or Dogecoin (DOGE), which utilize a proof-of-work consensus mechanism similar to Bitcoin, might be more likely candidates for the next spot ETF due to “cleaner paths” despite lower demand.
Regulatory Challenges for Solana
The discussion also highlighted regulatory hurdles, particularly comments from SEC Chair Gary Gensler, who has previously indicated that Solana could be considered a security. This designation has complicated implications for its eligibility for an ETF and was evident in previous lawsuits involving Coinbase and Kraken.
Despite regulatory uncertainties, Solana has attracted attention from large asset management firms. Franklin Templeton, a trillion-dollar asset manager, has recently expressed admiration for Solana and its co-founder Anatoly Yakovenko, leading to speculation about potential future ETF filings for Solana.
Matt Hougan’s View on Solana’s Prospects
Matt Hougan, Chief Investment Officer at Bitwise, labeled Solana as the “crypto asset of 2024,” citing its potential real-world applications that could attract institutional interest. His optimism reflects a growing belief in Solana’s utility beyond speculative trading.
| Expert | Viewpoint | Predicted Cryptocurrency |
|---|---|---|
| Brian Kelly | Optimistic about Solana | Solana (SOL) |
| Nate Geraci | Skeptical without regulatory clarity | TBD |
| James Seyffart | Sees potential but expects delays | Solana (SOL) |
| Adam Cochran | Favors Litecoin or Dogecoin for cleaner paths | Litecoin (LTC) or Dogecoin (DOGE) |
Brian Kelly’s speculation about a Solana ETF has sparked a vibrant debate among industry experts, revealing differing views on the readiness and suitability of various cryptocurrencies for ETF structures. As the SEC navigates these new waters, the outcomes will likely shape the landscape of cryptocurrency investment and regulation for years to come.
Featured image credit: Aivaras Sakurovas via Dreamtime