Brazil Approves Spot Solana ETF

SOL has outperformed in recent days, with the SOL/ETH ratio hitting an all-time high.

Brazil’s Securities and Exchange Commission (CVM) has greenlit a spot SOL exchange-traded fund (ETF).

Notably, this is the first Solana-based ETF in Brazil and one of the earliest such products globally.

According to a CVM filing on Wednesday, the ETF is currently in a “pre-operational stage,” meaning it is pending further approval from Brazil’s B3 stock exchange. Upon launch, the ETF will track the CME CF Solana Dollar Reference Rate, a benchmark developed by the Chicago Mercantile Exchange (CME) and CF Benchmarks.

The filing states that the ETF will be offered by QR Asset, a Brazilian asset management firm, and managed by Vortx, a service provider for fund managers.

Will the U.S. Get Solana ETFs?

In 2024, the U.S. approved spot Bitcoin and Ethereum ETFs for trading, but Solana has yet to receive similar approval.

In July, asset managers VanEck and 21Shares sought approval from the U.S. Securities and Exchange Commission (SEC) to introduce a Solana ETF. However, the SEC has yet to respond to this request.

Analysts currently consider the Solana ETF a long shot. According to Bloomberg Intelligence’s ETF expert James Seyffart, the Van Eck fund “only has a shot to launch sometime in 2025 if we have a new admin in the White House and SEC. Even then, it’s not guaranteed.”

Ryan Lee, Chief Analyst at Bitget Research, told the Defiant that the SEC’s inconsistent application of the Howey Test and its criteria for “sufficient decentralization” add uncertainty to whether Solana qualifies as a security. “This makes the path to an ETF approval rocky for Solana,” he said.

Several criteria must be met for an ETF to gain approval, including healthy liquidity, decentralization, resistance to price manipulation, and regulatory classification of the underlying asset.

Market participants agree that the chances are low. According to the prediction market Polymarket, Solana has just a 9% chance of getting a spot ETF approved in 2024.

3iQ’s Proposed Solana ETP

In June, Toronto-based investment fund manager 3iQ unveiled plans to introduce the first Solana exchange-traded product (ETP) in North America. If given the green light by the Ontario Securities Commission, this offering would trade on the Toronto Stock Exchange.

3iQ’s Solana ETP is a closed-end fund, meaning it would issue a fixed number of shares. On the other hand, the VanEck Solana Trust filed in the U.S. would continuously create and destroy shares based on market demand.

Eric Balchunas, an ETF analyst at Bloomberg, criticized 3iQ for selecting a closed-end design for the fund.“Went from kind of a big deal to almost totally insignificant,” he said.

Notably, the very first Solana-based ETP was introduced by 21Shares on the SIX Swiss Exchange in June 2021.