Delay in Fidelity's Solana ETF Approval Sparks Worry - Halt in Approvals Pushed to Fall
In a significant move towards standardising and streamlining the approval process for crypto Exchange-Traded Funds (ETFs), the Securities and Exchange Commission (SEC) is currently developing a comprehensive digital asset ETF framework. This framework, which aims to reduce the approval time from the current 240 days down to around 75 days, will introduce uniform listing rules such as valuation methods, custody and security protocols, benchmark index selection, and minimum liquidity thresholds for underlying tokens[1][3][5].
This regulatory move is expected to have a profound impact on altcoin ETFs, including Solana (SOL), Litecoin (LTC), Ripple (XRP), Dogecoin (DOGE), and Cardano (ADA).
Solana (SOL) has been at the forefront of this development, with Solana spot ETF applications actively being revised following SEC feedback. Major issuers like Fidelity, Bitwise, and VanEck have submitted applications, and there is strong optimism with a high probability (~90%) that Solana ETFs will be approved soon[2][3].
Litecoin (LTC) also stands a good chance of approval, with a 77% probability. Its similarity to Bitcoin in terms of market stature and technology could bolster its chances. Several firms including Canary Capital and Grayscale are in the process of filing applications[2].
Ripple (XRP) and Dogecoin (DOGE) are also gaining traction, with estimated approval chances around 75-80%. The SEC’s new framework could pave the way for these altcoins, which have previously faced regulatory hurdles[2][4].
Cardano (ADA) shares a similar positive outlook as XRP and is included among potential candidates with a 75% chance to be approved under the new rules[2].
The REX-Osprey SOL ETF, which offers staking, is under the Investment Company Act of 1940, unlike most altcoin ETFs. This sets it apart from other ETFs and could potentially expedite its approval[6].
Options traders expect SOL to remain range-bound within $140-$160 in the near term, as indicated by the concentration of call options at $152, $154, and $160, and put options at $140 and $144. However, a recent dip of about 2% from $154 to $147 after the update on the SEC's digital asset ETF framework suggests some market uncertainty[7].
Analyst James Seyffart expects the SEC's digital asset ETP framework to potentially extend the timeline for altcoin ETF approvals. He predicts that approval for altcoin ETFs could extend to Q4[8].
The broader regulatory move reflects the SEC’s intention to bring more clarity and efficiency to the crypto ETF market, which currently has over 50 products pending review. By establishing a unified framework, the SEC aims to promote greater access to regulated digital asset investments for institutional and retail investors alike. This could trigger an influx of altcoin ETFs following the precedent set by approved Bitcoin and Ethereum ETFs, potentially driving increased market participation and liquidity for these digital assets[1][2][3].
The SEC has asked issuers to refile their amended applications by the end of July, and the Grayscale multi-crypto index fund has been paused until the SEC's digital asset ETF framework is in place. The framework may also involve added disclosure requirements[8].
In summary, the SEC's evolving digital asset ETF framework is likely to accelerate the approval of altcoin ETFs such as Solana, Litecoin, Ripple, Dogecoin, and Cardano, with Solana leading the charge. This framework is expected to be finalized by late 2025 and will significantly reduce regulatory friction, enabling a new wave of regulated crypto investment products in the U.S. market[1][3][5].
- The Securities and Exchange Commission (SEC) is developing a comprehensive digital asset ETF framework, aiming to reduce the approval time for crypto ETFs from 240 days to around 75 days.
- Solana (SOL), Litecoin (LTC), Ripple (XRP), Dogecoin (DOGE), and Cardano (ADA) are expected to be significantly impacted by this regulatory move, with Solana having a high probability (~90%) of ETF approval soon.
- Litecoin (LTC) also stands a good chance of approval, with a 77% probability, and several firms like Canary Capital and Grayscale are in the process of filing applications.
- Ripple (XRP) and Dogecoin (DOGE) are estimated to have an approval chance around 75-80%, as the SEC's new framework could pave the way for these altcoins.
- Cardano (ADA) shares a similar positive outlook as XRP and is included among potential candidates with a 75% chance to be approved under the new rules.
- The REX-Osprey SOL ETF, offering staking, could potentially expedite its approval due to its status under the Investment Company Act of 1940, unlike most altcoin ETFs.
