The U.S. Securities and Exchange Commission (SEC) has taken a significant step towards recognizing the Solana blockchain as a legitimate investment option, acknowledging the application for a Solana exchange-traded fund (ETF). This marks a shift in the SEC’s stance on altcoin funds, especially Solana, whose token SOL has faced regulatory scrutiny in the past. Here’s what this move means for the crypto landscape.
On Thursday, the SEC issued a notice acknowledging the filing of the Grayscale Solana Trust, a proposal submitted by NYSE Arca. This acknowledgment marks the beginning of a review process under the SEC’s Form 19b-4, which requires the agency to approve or deny the application by October 11.
What makes this acknowledgment particularly significant is the SEC’s previous stance on Solana. Under the prior administration, Solana’s SOL token was labeled an “unregistered security” in enforcement lawsuits. However, the SEC’s current approach, under Chairman Gary Gensler, has shown a marked shift, signaling potential approval for crypto-based ETFs beyond Bitcoin and Ethereum.
A Positive Sign for Crypto Market and Solana
Bloomberg senior ETF analyst Eric Balchunas pointed out that just six weeks ago, the SEC had instructed the CBOE exchange to withdraw its Solana ETF application. This recent acknowledgment of the Solana ETF filing is seen as a positive sign, suggesting that leadership changes within the SEC may be influencing its more favorable outlook on crypto.
Moreover, James Seyffart, another ETF analyst at Bloomberg, believes the decision could signal positive outcomes for other exchanges under SEC lawsuits, where Solana has been previously labeled a security.
Notable bc this is the first time an ETF filing tracking a coin that had prev been called a "security" has been acknowledged by SEC. Only six weeks ago the Genz-led SEC told CBOE to withdrawal their Solana 19b-4. So we are now in new territory, albeit just a baby step, but… https://t.co/XiRyA8g3R7
— Eric Balchunas (@EricBalchunas) February 6, 2025
Solana’s Rise in the Crypto Market: A Historic ETF Approval?
Solana is now poised to become the first non-Bitcoin, non-Ethereum token to secure an ETF approval, a milestone that could transform the market. Litecoin, a Bitcoin fork, is also in contention but Solana’s recognition could be a historic breakthrough.
Matthew Nay, a research analyst at Messari, called the potential Solana ETF approval “historic,” noting that it marks a dramatic shift from the Solana token’s fall from grace following the FTX collapse. Nay explained that Solana has gone from being a disregarded asset to one that’s highly sought after by Wall Street.
Recent performance data backs up Solana’s growing appeal. According to Messari’s figures, Solana’s real economic value (REV)—which measures throughput—surged by 318% in Q4 2024, reaching $819 billion. This represents a staggering 5,649% year-over-year increase.
Additionally, the circulating market capitalization of Solana grew by 27% during the fourth quarter of 2024, reaching $90.7 billion. These numbers highlight Solana’s growing strength in the blockchain ecosystem.
A Flood of Solana ETF Proposals Awaiting SEC Approval
Currently, five separate Solana ETF proposals are awaiting action by the SEC, including applications from prominent names such as Bitwise, Canary, 21Shares, Van Eck, and Grayscale. Additionally, there are two “basket” ETFs that include Solana as part of their portfolio, including Bitwise’s 10 Crypto Index ETF and the Grayscale Digital Large Cap ETF.
Now that the SEC has acknowledged Grayscale’s Form 19b-4 filing, a detailed five-step process will follow before a final approval or rejection is made:
- 15-Day Publication: The SEC must publish the proposed rule change in the Federal Register, opening a public comment period lasting 21 days.
- 45-Day Review: The SEC has 45 days to approve, disapprove, or extend the review period. If no action is taken, the application is automatically approved.
- Second 45-Day Review: A second 45-day review period can be requested.
- 90-Day Review: A 90-day review period is available if needed, potentially extending the total process to 240 days.
- Final Decision: After the review periods, the SEC will make its final decision. Applicants have the option to withdraw and resubmit, restarting the process. In case of disapproval, the decision can be challenged in court.
Solana’s Path to an ETF Could Be Just the Beginning
The SEC’s acknowledgment of the Solana ETF filing represents a pivotal moment in the broader crypto landscape, suggesting that altcoins may finally have a pathway to ETF approval. With the growing demand for Solana and its impressive market growth, this could be a crucial turning point, not just for Solana but for the entire cryptocurrency ecosystem.
