Solana ETF Increasingly Likely After the SEC’s Unprecedented Step

The Securities and Exchange Commission (SEC) has acknowledged an application for a Solana exchange-traded fund (ETF), signaling a major shift in the agency’s stance towards altcoin funds.

On Thursday, the SEC issued a notice acknowledging a filing from NYSE Arca, which proposes to list and trade the Grayscale Solana Trust.

By acknowledging a document called form 19b-4, the enforcement agency is starting the clock on a process under which it must approve or deny the application by Oct. 11.

The Solana application’s acknowledgment is notable because the previous administration specifically labeled Solana’s SOL an unregistered security in enforcement lawsuits. The agency’s attitude towards crypto has changed dramatically from its hostile, pre-Trump outlook.

Bloomberg senior ETF analyst Eric Balchunas noted that just six weeks ago, the SEC under Chairman Gary Gensler told the CBOE exchange to withdraw a Solana 19b-4 application.

“So we are now in new territory, albeit just a baby step, but seemingly the direct result of leadership change,” he said in an X post.

Balchunas’s colleague James Seyffart said the news might be “a positive sign for anyone, or any exchange, facing an active SEC lawsuit where the SEC blatantly claims that Solana is a security in the suit.”

A Win for Solana

Solana is now clearly in the running to become the first non-Bitcoin, non-Ethereum token to be approved for an ETF. Litecoin, a Bitcoin fork, is also considered a strong contender.

"An ETF for Solana would be historic,” Messari research analyst Matthew Nay told The Defiant, adding that it marked a huge turnaround from where the token was after the FTX collapse.

“It has transformed from an asset that no one wanted a part of, to now a highly desired asset by Wall Street,” Nay said. “The inflows to Solana would also accelerate the growth of the ecosystem that we are already witnessing, since applications are generating record numbers in revenue.”

Solana has been on a tear lately, according to Messari’s figures. Its real economic value (REV), a measure of throughput, climbed 318% in Q4, to $819 billion. That’s a 5,649% increase year-over-year. REV is obtained by adding the revenue generated from network fees and from maximum extractable value (MEV) extraction by validators.

Its circulating market capitalization grew 27% in the fourth quarter of 2024, rising to $90.7 billion.

What’s Next

There are currently five Solana ETFs proposals awaiting SEC action, plus at least two more “basket” ETFs that include Solana

Bitwise, Canary, 21 Shares, Van Eck and Grayscale have straight Solana spot ETF applications before the SEC. In addition, the Bitwise 10 Crypto Index and the Grayscale Digital Large Cap ETFs both include Solana.

Now that Grayscale’s 19b-4 has been acknowledged, there is a five-step process leading to approval or disapproval.

First, the agency has 15 days to publish the rule change in the Federal Register. This opens up a public comment period, usually 21 days

Second is a 45-day review period in which the SEC can approve, disapprove or extend the review period. Failure to take action leads to automatic approval.

Third is a second 45-day review period, if requested.

Fourth is a 90-day review period, if requested, for a total of 240 days maximum.

Fifth is the approval or disapproval decision. An applicant can withdraw and resubmit a proposal, restarting the process.

Beyond that, a disapproval can be challenged in court.