Crypto investor and trader Brian Kelly has sparked speculation about Solana (SOL) potentially becoming the next cryptocurrency to have a spot exchange-traded fund (ETF) in the United States. Kelly, also the founder and CEO of the BKCM Digital Asset Fund, made the suggestion on a recent episode of CNBC’s 'Fast Money', highlighting Solana as one of the top contenders for this cycle alongside Bitcoin and Ethereum. However, conflicting opinions and regulatory hurdles cast shadows over Solana's ETF prospects.

Mixed Views on Solana ETF

While Kelly sees Solana as a strong candidate for an ETF, others like Nate Geraci, president of The ETF Store, express skepticism. Geraci believes that a spot Solana ETF might not materialize until a futures product for Solana is listed on a major exchange or until clearer regulatory frameworks are established for cryptocurrencies beyond Bitcoin and Ethereum. James Seyffart, an ETF analyst at Bloomberg, shares similar sentiments, predicting that regulatory milestones, including approval from the Commodity Futures Trading Commission (CFTC), could delay the launch of a Solana ETF for years.

Regulatory Challenges and Complexities

Regulatory hurdles pose significant challenges for potential Solana ETF applicants. The Securities and Exchange Commission (SEC), under Gary Gensler's leadership, has previously categorized Solana as a security in lawsuits against Coinbase and Kraken. This classification complicates the path for ETF approval, raising uncertainties about Solana's regulatory status and its suitability for an ETF.

Alternative Contenders and Speculation

Despite the uncertainties surrounding Solana, alternative contenders like Litecoin (LTC) or Dogecoin (DOGE) may beat Solana to the ETF race due to perceived cleaner regulatory pathways, according to Adam Cochran, a partner at Cinneamhain Ventures. Speculation about Franklin Templeton's potential interest in launching a Solana ETF adds to the intrigue surrounding the ETF landscape.

Fidelity's Amended S-1 Application

In a related development, Fidelity filed an amended S-1 application with the SEC for its spot Ether ETF. The updated application specifies that the underlying Ether tokens of the ETF will not be staked. This move comes amidst heightened speculation about the approval of spot Ether ETFs, which has also boosted spot Bitcoin ETFs, as evidenced by the recent inflows into BlackRock’s iShares Bitcoin Trust (IBIT).

Conclusion

The possibility of a Solana ETF remains uncertain amid regulatory complexities and conflicting opinions within the crypto community. While some view Solana as a promising candidate for an ETF, regulatory challenges and alternative contenders could delay its launch. As the SEC continues to navigate the evolving crypto landscape, the fate of Solana's ETF aspirations hangs in the balance, leaving investors and market participants eagerly awaiting regulatory clarity and decisive actions.