VanEck Pioneers Solana Spot ETF Application
Another ETF has been filed in the USA this time the asset in question is Solana! Investment management firm VanEck has taken the bold leap by applying for the first Solana spot ETF in the United States.
As it aims to simplify investor access to Solana. The VanEck Solana Trust will issue shares that directly track Solana’s performance, without engaging in staking activities.
The primary objective of the VanEck Solana Trust is to replicate Solana’s price action (SOL), net of operating expenses. It achieves this by holding SOL and calculating daily share values based on the MarketVectorTM Solana Benchmark Rate.
This rate draws from prices contributed by leading SOL trading platforms, as calculated by MarketVector Indexes GmbH, an affiliate of the Trust’s Sponsor.
Key Components of the Solana Spot ETF
The Trust comprises key representatives: VanEck Digital Assets, LLC (acting as the Sponsor) and Delaware Trust Company (acting as the Trustee). A designated SOL Custodian securely holds the Trust’s SOL.
Crucially, the Trust refrains from staking activities, ensuring it neither earns additional SOL nor generates income from staking rewards.
“The Trust will continuously issue shares and has registered an indeterminate number with the SEC. All share sales and redemptions will occur in blocks called ‘Baskets.’ Each Basket’s value equals the NAV of the included shares, less Sponsor fees and other expenses.”
Operational Mechanics
Currently, subscriptions and redemptions are settled exclusively in cash. Authorized Participants deliver cash to create shares and receive cash upon redemption.
The Trust’s shares are registered with the SEC under the Securities Exchange Act of 1933, though not under the Investment Company Act of 1940.
Additionally, the Trust does not qualify as a commodity pool under the Commodity Exchange Act, and its Sponsor need not register with the Commodity Futures Trading Commission.
Challenges and Further Prospects
The Solana spot ETF faces challenges. Unlike Bitcoin and Ethereum, there is no futures ETF for Solana. Moreover, the SEC previously classified SOL as a security, leading to its delisting from platforms like Robinhood.
Bloomberg ETF analyst James Seyffart suggests that while VanEck’s application may serve as a base case for other Solana ETFs, it remains uncertain whether other issuers will follow suit.
However, if new management decisions occur at the White House and the SEC, the Solana ETF could emerge as early as 2025.
VanEck’s effort could pave the way for other crypto assets, revolutionizing investment. The VanEck Solana Trust promises easier access to Solana, renowned for its superior user experience compared to Ethereum.
