The Head of Digital Assets Research at VanEck, Matthew Sigel, has confirmed speculation that the company’s Solana spot ETF proposal is based on a political bet on Donald Trump winning the US presidency. The deadline for VanEck’s application is set for March 2025, which extends beyond the aftermath of the US Presidential elections in November.
Analysts have stated that the approval odds for VanEck’s ETF proposal are “near zero” if a Democrat victory leaves Joe Biden in office, while the chances are “better … but not guaranteed” if Trump wins the election. Trump would likely appoint a new SEC chair if he were to win, potentially impacting the approval process for the ETF.
An issue seen as a hurdle to the potential Solana ETF is the lack of a futures market on CME, which was a crucial factor in the approval of spot Bitcoin and Ethereum ETFs. Grayscale argued that surveillance sharing agreements in place for the CME Bitcoin futures were replicable for spot ETFs and sufficient to detect and prevent fraudulent activities. The SEC’s demand for specific surveillance-sharing agreements for spot Bitcoin ETFs has been a point of contention.
The SEC has now approved spot ETFs for Bitcoin and Ethereum, leading to speculation that VanEck may not need to demonstrate a CME futures market around Solana to obtain approval. Surveillance sharing agreements with spot crypto exchanges could obviate the need for CME futures, according to Sigel. Bloomberg analysts believe that an SSA should be enough, but the success of VanEck’s approach may depend on new leadership at the SEC or congressional action.
Historical Precedents and Complications
Past ETF filings, including BlackRock’s spot Bitcoin ETF application, have included surveillance-sharing agreements with exchanges like Coinbase. However, analysts have noted that these agreements ultimately proved unnecessary. The SEC’s ongoing securities lawsuits against exchanges such as Coinbase and Kraken have also complicated SSAs between exchanges and ETF issuers.
By analyzing the speculation and dynamics surrounding VanEck’s Solana spot ETF proposal, it becomes clear that political factors, regulatory challenges, and historical precedents all play a role in shaping the future of cryptocurrency ETFs. The intersection of politics, regulation, and market dynamics will continue to influence the development of these financial products in the coming years.
