- BlackRock has recently stated that it does not plan to launch a Solana (SOL) ETF in the near future, even though its Bitcoin and Ethereum ETFs have performed exceptionally well this year.
- This decision leaves the field open for other asset managers to explore small-cap altcoin ETFs, with some already moving to file for their launch.
- BlackRock CIO Samara Cohen emphasized the importance of “investability” and client demand, indicating that Bitcoin and Ethereum currently meet these criteria, while smaller altcoins do not.
Discover why BlackRock is hesitant to introduce a Solana ETF and what this means for the broader crypto asset management landscape.
BlackRock’s Stance on Solana ETF
In a recent interview with Bloomberg, BlackRock Chief Investment Officer Samara Cohen clarified the asset manager’s position on launching a Solana ETF. Cohen mentioned that the company did not see a Solana ETF as feasible in the near term, emphasizing the need for an asset to meet stringent criteria of investability and client demand. For now, Bitcoin and Ethereum fit these benchmarks while Solana does not.
Performance of Bitcoin and Ethereum ETFs
BlackRock’s foray into crypto ETFs has proven remarkably successful, particularly with its Bitcoin and Ethereum spot ETFs. The iShares Bitcoin Trust (IBIT) has attracted close to $20 billion in flows since its inception in January 2023, setting a historic record for the best-performing ETF in its opening month. Similarly, the newly launched Ethereum ETF has managed to accumulate around $440 million in assets within its first week, showcasing significant investor interest.
Market Viability of Solana ETF
Despite the success of Bitcoin and Ethereum ETFs, leaders at BlackRock suggest that a Solana ETF would not yet meet the company’s rigorous standards. According to Robert Mitchnick, BlackRock’s Head of Digital Assets, the market cap and liquidity of Solana are insufficient to justify its inclusion in an ETF portfolio at this time. Mitchnick further noted that Bitcoin remains the primary focus for most of their crypto-focused clients, with Ethereum also receiving some interest.
Other Firms Eyeing Solana ETF
While BlackRock remains cautious, other asset management firms are positioning themselves to fill the gap. For instance, VanEck became the first company to file for a Solana spot ETF in the United States this past June. VanEck argued that SOL is structurally similar to BTC and ETH, both of which regulators have approved for ETFs. However, unlike Bitcoin and Ethereum, Solana lacks a futures market on the CME, complicating its regulatory approval process.
Regulatory Challenges
Regulatory clarity remains a significant hurdle for Solana’s ETF ambitions. The SEC has yet to decide if SOL qualifies as a security token, a point of contention evident in its ongoing lawsuit against Coinbase. Until there is a clear regulatory framework governing Solana’s classification, launching an ETF based on SOL will continue to face substantial barriers.
Conclusion
In summary, BlackRock’s reluctance to launch a Solana ETF underscores broader market and regulatory uncertainties. Bitcoin and Ethereum remain the focal points for ETF products due to their established investability and client demand. This hesitancy, however, provides an opportunity for other asset managers to venture into the small-cap altcoin space. As regulatory landscapes evolve, we might see new ETFs emerge, but for now, Solana remains on the periphery of mainstream financial products.
