The VanEck Head of Digital Assets Research, Matthew Sigel, recently confirmed that the company’s Solana spot ETF proposal is contingent on Donald Trump winning the US presidency. This bold strategy has raised eyebrows in the financial world, especially considering the current political climate in the United States.
Analysts are skeptical about the approval odds for VanEck’s ETF proposal, especially if a Democrat emerges victorious in the presidential elections. The possibility of Joe Biden remaining in office could spell near-zero chances of approval for the ETF. However, if Trump secures another term, the odds improve slightly, though they are still not guaranteed.
One major obstacle facing the potential approval of the Solana ETF is the absence of a futures market on the Chicago Mercantile Exchange (CME). This lack of a futures market could hinder regulatory approval, as seen in the cases of spot Bitcoin and Ethereum ETFs, which benefited from having a futures market in place.
Grayscale argued that surveillance sharing agreements, similar to those established for CME Bitcoin futures, could be replicated for the proposed spot ETF. These agreements are crucial for detecting and preventing fraudulent activities within the ETF market. However, the SEC’s demand for a specific surveillance-sharing agreement for spot Bitcoin ETFs raised questions about the agency’s consistency in applying standards across different types of ETFs.
Despite the challenges, Matthew Sigel remains optimistic about VanEck’s ETF proposal. He believes that surveillance sharing agreements with spot crypto exchanges could eliminate the need for a CME futures market. Bloomberg analysts support this view, stating that an SSA should suffice for regulatory approval, provided there is new leadership at the SEC or legislative action from Congress.
The ongoing securities lawsuits against prominent exchanges like Coinbase and Kraken further complicate the landscape for ETF issuers. These legal battles add another layer of uncertainty to the approval process for ETF proposals, highlighting the interconnected nature of the cryptocurrency and regulatory environments.
VanEck’s ETF proposal betting on a Trump presidency faces significant hurdles and uncertainties in the current regulatory landscape. While the potential use of surveillance sharing agreements offers a glimmer of hope for approval, the political and legal challenges ahead are substantial. Only time will tell whether VanEck’s bold strategy will pay off in the end.
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