- The SEC acknowledged filings for Grayscale’s Solana and Litecoin ETFs, starting the review process.
- Analysts say Solana’s legal hurdles could cause a delay in approval.
- JPMorgan estimates Solana ETFs could see $3 billion to $6 billion in inflows.
The crypto exchange-traded fund market, which has been dominated by Bitcoin and Ethereum, may soon become more crowded.
On Thursday, the US Securities and Exchange Commission acknowledged filings for the Grayscale Litecoin Trust and Solana Trust, marking the first step in its review process.
This is particularly notable because “the SEC had refused to do this in recent filing attempts for Solana,” said Bloomberg Intelligence analyst James Seyffart.
These acknowledgments put the SEC on the clock, with a final decision deadline expected by October 11 at the latest, according to Seyffart.
Solana ETFs
Analysts predicted that the floodgates for crypto investment products would open once Gary Gensler stepped down as SEC chair and the Trump administration took over.
And it seems that shift is already underway.
“Only six weeks ago, the Gensler-led SEC told Cboe to withdraw its Solana ETF application. So we are now in new territory,” said Bloomberg Intelligence analyst Eric Balchunas.
Despite this, legal uncertainty lingers. The SEC has previously categorised Solana as a security in ongoing lawsuits against major exchanges.
“The lawsuits and stuff from the division of enforcement need to be cleared before they can approve a Solana ETF,” said Seyffart.
Still, analysts see strong demand for Solana-based ETFs, with JPMorgan predicting inflows between $3 billion and $6 billion.
However, the bank’s analysts expect Solana and other altcoins to trail Ethereum and Bitcoin in adoption.
“They will match if not fall below Ethereum ETF expectations given their altcoin status,” JPMorgan researchers wrote.
Ethereum ETFs have underperformed their Bitcoin counterparts since their approval in the US last year.
Bitcoin has racked up total inflows of around $41 billion while Ethereum funds have only managed around $3.2 billion.
Litecoin ETFs
Alongside its Solana Trust, the SEC has acknowledged Grayscale’s Litecoin Trust filing.
Canary Capital has also proposed a Litecoin ETF, which some predict will beat out Solana to become the first altcoin ETF approved under the Trump administration.
Unlike Solana, Litecoin hasn’t been labeled a security, which could make regulatory approval more straightforward.
“Litecoin ETFs now have all the boxes checked,” said Balchunas. “With a new SEC sheriff in town, this could be the first altcoin ETF to hit the market.”
However, some analysts caution that Litecoin’s lack of a regulated futures market could complicate its path to approval.
Historically, the SEC has prioritised ETFs tied to assets with well-developed CME-listed futures markets.
Crypto market movers
- Bitcoin has lost 0.5% over the past 24 hours and is trading at $97,720.
- Ethereum is down 1% over the same period to $2,750.
What we’re reading
- Who is Hester Peirce? Crypto’s favourite regulator kicks off a new era ― DL News
- $MSTR’s 2025 plans revealed ― Milk Road
- Ahead of Debanking Hearings, Industry Is Divided on Political Strategy ― Unchained
- There’s a storm brewing in stablecoins ― Milk Road
Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
