Source: CoinWorld

Author: Web3 Scent Observation

Spot ETFs are a compliant entry point for traditional financial capital into the world of crypto assets. Since the approval of the Bitcoin spot ETF in the U.S. in January this year, crypto assets have experienced a rare bullish trend. Recently, the Ethereum spot ETF was also approved in the U.S. Following Bitcoin and Ethereum, there is much speculation about which asset will be next for an ETF, with Solana being the most talked about. Surprisingly, Brazil has taken the lead over the U.S. by officially approving the world's first Solana spot ETF.

1. Impact of Brazil's Launch of Sol ETF: Sol Asset Price Rises 6.55%

On August 8, news broke that Brazil's Securities and Exchange Commission (CVM) officially approved the world's first Solana spot ETF. According to reports, this investment product is provided by QR, which has launched Bitcoin and Ethereum ETFs, and will be managed by Vortx. Currently, the ETF is still in the pre-operation phase and needs to obtain approval from B3 due to regulatory reasons, with an expected launch within 90 days.

As a result of this news and the recent market rebound, SOL has risen to over $150. According to the current CoinWorld market data, the current price of SOL is $154.26, with an intraday increase of 6.55%.

It is understood that Brazil's asset management company QR Asset will issue this ETF, while the local fintech company Vortx, focused on capital markets, will serve as its manager. The Solana ETF approved by CVM will use the CME CF Solana Dollar Reference Rate as its reference price, which aims to provide a reliable and transparent measure of the value of Solana (SOL) against the U.S. dollar (USD).

This is Brazil's first Solana spot ETF product and one of the first exchange-traded products (ETPs) for Solana globally. Currently, the only Solana ETPs trading worldwide include the 21Shares Solana ETP (ASOL) traded on the SIX Swiss Exchange and the CoinShares Physical Solana and ETC Group Physical Solana traded on the Deutsche Börse Xetra in Germany.

The index was developed in collaboration between the Chicago Mercantile Exchange (CME) and Crypto Facilities (CF) to provide standardized and precise pricing for Solana based on trading data from major cryptocurrency exchanges.

2. Brazil Takes the Lead with Solana Spot ETF, Potentially Influencing Countries like Canada

The launch of the Solana ETF in Brazil has garnered widespread attention in the international crypto market and may further enhance institutional interest and investment in Solana. This move follows the U.S. approval of spot Bitcoin and Ethereum ETFs, bringing new momentum to the global cryptocurrency market.

Investment management company VanEck was the first to submit an application for a Solana spot ETF in the U.S. However, unlike Brazil's approval of the Solana ETF, VanEck's CEO Jan van Eck anticipates that the application will not be approved in the short term due to the current policies of the U.S. Securities and Exchange Commission (SEC). Jan van Eck mentioned that the approval of the Solana spot ETF may depend on changes in U.S. political management, particularly the potential election of a president more supportive of cryptocurrencies.

Companies like 21Shares have also submitted applications for Solana spot ETFs. Additionally, in Canada, 3iQ is seeking to launch a similar product on the Toronto Stock Exchange, which may influence future approvals in the U.S.

Due to the regulated nature of ETFs, their trading convenience, and the ability to easily integrate into existing investment strategies, they are often favored by institutional investors. The influx of institutional capital is expected to enhance market stability and liquidity, and as demand increases, the price of Solana may rise accordingly.

The approval of the Solana ETF will enhance Solana's credibility and legitimacy in traditional finance. Similar to the approval of Bitcoin and Ethereum ETFs, it may encourage conservative investors to include it in their portfolios and inspire other blockchain projects to pursue similar regulatory paths, driving innovation and adoption in the industry.

For the broader cryptocurrency market, the approval of the Solana ETF could set a precedent for other cryptocurrency ETFs, leading to an increase in the number of crypto-based ETFs. As various projects strive to meet the expectations of institutional investors, competition among blockchain platforms will intensify, promoting advancements in technology, scalability, security, and user experience.

3. The U.S. Stance on Sol ETF Differs from Brazil, Continued Observation Needed

Brazil is the largest country in South America, with a population of over 214 million, making it the fifth largest country by area and the sixth largest by population in the world. Brazil is widely regarded as one of the most crypto-friendly countries globally, with regulations and policies aimed at promoting citizen adoption of cryptocurrencies and other digital assets. According to previous reports, Brazil is among the top five countries with the most cryptocurrency investors, boasting over 10 million crypto investors, approximately 5% of its population, trailing only India, the U.S., Russia, and Nigeria.

Brazil's market is also fertile ground for ETFs. Between 2021 and 2022, Brazil launched a Bitcoin ETF and an Ethereum ETF, and in March 2024, it began offering the BlackRock iShares Bitcoin Trust ETF (IBIT).

Although Brazil has officially approved the Solana spot ETF, there are still many challenges regarding the approval for listing by the U.S. Securities and Exchange Commission (SEC).

Previously, Solana was deemed a security by the SEC due to its insufficient level of decentralization. However, the SEC has recently removed Solana (SOL) from its list of securities, indicating that U.S. cryptocurrency regulation may be changing, and the SEC might be easing its crackdown on cryptocurrencies. This move is interpreted as potentially paving the way for the future launch of a Solana ETF.

The SEC's approval of Bitcoin and Ethereum ETFs indicates a gradual shift in the regulatory agency's attitude toward cryptocurrencies, potentially opening doors for Solana to gain similar recognition and legitimacy. Bitcoin and Ethereum possess hard strengths in the cryptocurrency market that other projects cannot replicate, established through a proof-of-work (PoW) mechanism by miners worldwide.

However, if the SEC approves the Solana spot ETF, it may face the dilemma of being unable to reject applications from thousands of other public chains, leading to an oversaturation of cryptocurrency ETFs in the market. Whether regulatory bodies can cope with this is also a significant concern. Therefore, it may take a long time to plan before institutions like the SEC find executable solutions.