As the 2024 US presidential election approaches, the outlook for altcoin exchange-traded funds (ETFs), and Solana in particular, could change significantly depending on the political outcome.
The Securities and Exchange Commission (SEC) has recently been somewhat lenient, allowing fund managers to list Ethereum spot ETFs. But SEC Chairman Gary Gensler warned that it would take time to roll out.
Trump victory could increase odds of Solana ETF approval
Speculation about the next potential cryptocurrency ETF has already begun, with Solana emerging as a viable contender. Cathie Wood, CEO and CIO of ARK Invest, said major financial institutions are likely to focus on top cryptocurrencies when pursuing new ETFs, mentioning Solana as the next potential target.
Interestingly, Franklin Templeton, which manages approximately $1.64 trillion in assets, praised Solana's significant growth and hinted at launching an altcoin fund .
“At Solana, we see Anatoly’s single-atom state machine vision as a powerful use case for decentralized blockchains and reducing information asymmetry. And I am impressed by all the activity seen on Solana in Q4 2023: Defin, decentralized finance, meme coins, NFTs, and Firelancer,” said Franklin Templeton.
Meanwhile, CoinShares has seen a significant increase in altcoin holdings among hedge funds and asset managers, noting Solana in particular. Ophelia Snyder, co-founder and president of 21.co, echoed this growing interest by reporting that the company's Solana exchange-traded product (ETP) has nearly $990 million in assets under management on European exchanges.
Read more: How to Buy Solana (SOL) and Everything You Need to Know
Given Donald Trump's stance as a pro-crypto candidate, Bloomberg ETF analyst Eric Balchunas speculated that a Trump victory could lead to a more favorable environment for altcoin ETFs. Trump is likely to appoint a new SEC chairman with a more lenient approach to cryptocurrencies.
In fact, if Trump wins the 2024 US presidential election, as Wood mentioned, ETF issuers could flood the SEC with new applications for various altcoin ETFs, including Solana.
“If Trump wins, other coins could also be launched as ETFs,” Balchunas said .
Despite this enthusiasm, approval from U.S. regulators remains stringent, and the SEC's recent approval of an Ethereum ETF was a tricky process. Balchunas noted that the SEC's approval timeline could delay the introduction of other altcoin ETFs by several years.
Read more: Solana (SOL) Price Prediction for 2024/2025/2030
He also noted that a continued Democratic administration could maintain the current restrictive approach, reducing the likelihood of new altcoin ETFs being approved. Therefore, until then, the approval process will remain cautious and conservative.
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