TL;DR
- BlackRock’s Decision: BlackRock, a major issuer of Bitcoin and Ethereum ETFs, has definitively ruled out launching a Solana ETF in the near future. Despite Solana’s rapid growth, BlackRock cites low demand and technical concerns as reasons for this decision.
- Investability Criteria: Samara Cohen, BlackRock’s CIO for ETF and Index Investments, emphasized that they evaluate investability and client demand. While BTC and ETH meet their criteria, Solana falls short due to factors like track record and liquidity.
- Market Impact: SOL’s recent rally was dampened by speculation about a Solana ETF. The token dropped 6% after a 10% surge, possibly influenced by broader market movements.
BlackRock, the world’s leading issuer of spot Bitcoin and Ethereum exchange-traded funds (ETFs), has definitively ruled out the possibility of launching a Solana ETF in the near future. The decision comes as the Solana (SOL) blockchain experiences rapid growth and approaches its yearly high.
While BlackRock remains uninterested, other asset managers, including VanEck, have submitted applications to the US Securities and Exchange Commission (SEC) for a Solana ETF.
Samara Cohen, BlackRock’s Chief Investment Officer (CIO) for ETF and Index Investments, addressed the matter during an interview on Bloomberg TV. She emphasized that BlackRock evaluates investability and client demand when considering new ETF products.
According to Cohen: “Not in the near term. We really look at the investability to see what meets the criteria, meets the bar, to be delivered in an ETF. For us, both between investability considerations and also what we hear from our clients, BTC and ETH definitely meet that bar. I think it will be a while before we see anything else.”
Robert Mitchnick, BlackRock’s Head of Digital Assets, echoed this sentiment at the Bitcoin Conference 2024. He cited several reasons why a Solana ETF remains elusive, including the blockchain’s track record, liquidity, and market capitalization:
“I don’t think we’re going to see a long list of crypto ETFs. If you think of Bitcoin, today it represents about 55% of the market cap. ETH is at 18%. The next plausible investible asset is at, like, 3%. It’s just not close to being at that threshold or track record of maturity, liquidity, et cetera.”
Differing Views and Market Impact on Solana
Nate Geraci, President of ETF Store, disagreed with BlackRock’s stance. He pointed out that exchange-traded products for other digital assets, including Solana, are already traded in Europe. However, Geraci acknowledged that regulatory changes would be necessary for a similar product to emerge in the US.
Despite the rejection, SOL had been on a bullish trajectory until recently. However, speculation about a potential Solana ETF dampened its rally. The token dropped over 6% today after a nearly 10% surge the previous day. SOL’s price swung from $182 on July 28 to $193.66 on July 29, only to retreat to $181.84.
The recent volatility may also be linked to broader market movements. The US government’s transfer of approximately $2 billion in BTC to Coinbase, signaling a potential sell-off, contributed to market uncertainty.
Interestingly, former President Donald Trump’s pro-Bitcoin remarks at the Bitcoin Conference had initially fueled the crypto rally. Notably, one of his promises was to ensure the US retains its Bitcoin holdings.
Despite the setback, SOL remains one of this year’s top performers. With a 28% gain in the past 30 days and a 625% year-to-date appreciation, investors remain optimistic. A recent CoinGecko survey revealed that 25% of respondents expect SOL to reach as high as $300 during this cycle, while only 10.6% anticipate a $1,000 price level.
