SEC Commissioner Peirce Weighs In On Solana ETF Applications

After correctly signaling why the Securities and Exchange Commission would approve Ethereum ETFs, SEC Commissioner Hester Peirce joined Coinage once again to share her thoughts on how the agency is looking at crypto beyond just Bitcoin and Ethereum.

But what worked for the two largest cryptocurrencies to get across the ETF finish line might not apply to other projects waiting in the wings.

Both VanEck and 21Shares filed applications for Solana exchange traded products over the past month, but Commissioner Peirce was not extremely optimistic the process would be as clear cut.

"We really have to look at that on a case by case basis," she said, not commenting on any one application itself. "This environment with crypto is so difficult, of course, because there are questions around what what my colleagues and I are going to think is a security and not — there are all these kinds of questions. But again, we really should just take the existing precedent and apply it to whatever the facts and circumstances are."

That process worked in Ethereum's favor for those ETF applications to win approval after Bitcoin ETFs were approved in January. Both cryptocurrencies boasted an existing Chicago Mercantile Exchange futures market that already demonstrated a track record of mature trading without market manipulation concerns. Solana, for its part, doesn't have a similar existing CME futures market.

Some in the crypto community had hoped that Solana wouldn’t need to first boast a robust and mature Chicago Mercantile Exchange futures market before the SEC might feel comfortable approving any similar products. VanEck’s Head of Digital Assets Research Matthew Sigel, for example, had recently argued on a podcast that there might be alternative paths to ensuring an unmanipulated market, like surveillance sharing agreements between crypto exchanges and stock exchanges.

“I think people need to look and see whether there have been other types of markets or other types of products where there hasn't been a futures market underlying it, and then they can make the case based on that,” Commissioner Peirce said.

Bloomberg Intelligence analyst James Seyffart had previously told Coinage he didn't think a Solana ETF would be approved anytime soon.

"I've been in the camp we were going to get a Bitcoin ETF first, then we'll get Ethereum and then it could be a very large gap until something else," he said, noting a new administration and SEC Chair could likely change all that. "I mean, you've got to wait 240, 260-ish days before you can even get a 19b-4 approval order under the current processes. So you're looking decently into 2025."

Ethereum ETFs are expected to make their trading debuts on July 23. Analysts like Fundstrat's Sean Farrell tell Coinage that the market may be underestimating potential inflows in the first few months.

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