VanEck’s Head of Digital Assets Research, Matthew Sigel, recently confirmed that the company’s Solana spot ETF proposal is betting on Donald Trump winning the US presidency. The proposal’s deadline is set for March 2025, well after the November US Presidential elections. Sigel’s confirmation of this speculation raises interesting questions about the company’s strategy and the potential impact of political outcomes on ETF approval.
Approval Odds and Political Landscape
Analysts have suggested that the approval odds for VanEck’s Solana ETF are “near zero” in the event of a Democrat victory that leaves Joe Biden in office. However, the odds improve, though not guaranteed, if Trump wins the election. This prediction is based on the assumption that Trump would appoint a new SEC chair to replace the current chair, Gary Gensler. The political dynamics at play highlight the complexity of regulatory approval processes and the influence of government leadership on financial markets.
One major obstacle to the potential approval of the Solana ETF is the absence of a futures market on CME. This lack of a futures market is seen as a crucial factor in the approval of spot Bitcoin and Ethereum ETFs by regulatory authorities. Grayscale’s argument against the SEC emphasized the replicability of surveillance sharing agreements from the CME Bitcoin futures market for spot ETFs. The case raised questions about the consistency of the SEC’s standards across different types of Bitcoin-related ETFs.
Surveillance Sharing Agreements
The need for surveillance sharing agreements (SSAs) with spot crypto exchanges has been a key point of contention in the approval process for ETFs. While past filings, such as BlackRock’s spot Bitcoin ETF application, included SSAs with exchanges like Coinbase, the necessity of these agreements has been called into question. The SEC’s lawsuits against exchanges like Coinbase and Kraken further complicate the implementation of SSAs between exchanges and ETF issuers.
Despite the challenges and uncertainties surrounding the approval of VanEck’s Solana spot ETF proposal, there is optimism regarding the potential role of SSAs in facilitating regulatory approval. Sigel’s belief that SSAs with spot crypto exchanges could eliminate the need for a CME futures market represents a shifting perspective on regulatory requirements. However, as Bloomberg analysts note, the success of this approach may depend on changes in leadership at the SEC or legislative intervention.
The implications of VanEck’s Solana spot ETF proposal extend beyond financial markets to the realm of politics and regulation. The company’s strategic bet on the outcome of the US presidential elections underscores the interconnectedness of government decisions and market dynamics. As the regulatory landscape continues to evolve, the future of ETF approvals remains uncertain, with political leadership playing a significant role in shaping these outcomes.