- BlackRock is confident in the approval of crypto ETFs based on new altcoins in the near future.
- The obstacles are the SEC’s stance and the “immaturity” of alternatives.
- A SOL-ETF might not appear before March 2025, contingent on a positive outcome in the US presidential elections in November.
Following the launch of spot ETH-ETFs, the introduction of exchange-traded funds based on other altcoins should not be expected. This was stated by Robert Mitchnick, head of digital assets at BlackRock, according to The Block.
“I don’t think we’ll see a long list of crypto ETFs. Bitcoin accounts for ~55% of the market capitalization. Ethereum makes up 18%. The next suitable investment asset forms about 3%. It just doesn’t come close to that threshold and lacks the experience, maturity, liquidity, etc.,” explained the top manager.
The expert acknowledged that it is becoming “increasingly clear” that cryptocurrencies as an asset class “will not disappear.” In the future, companies like BlackRock may have additional opportunities for further market participation, he added.
“We do not see Bitcoin and Ethereum as competitors. The former is trying to become a global monetary alternative, a potential global payment system, while the latter is better viewed as a technological platform for creating new applications. So, in reality, they complement each other rather than replace,” Mitchnick pointed out.
The top manager explained that in the absence of “full regulatory clarity,” SEC has clearly indicated where “the line is drawn.” In particular, the Commission will not approve spot ETH-ETFs with a staking option.
Unique Characteristics of BTC-ETF
A BlackRock representative noted the fundamentally different value proposition of Bitcoin compared to other types of assets. According to him, all categories of clients are showing growing interest, allocating 2–3% of their funds.
Mitchnick also noted interest in BTC-ETF from investment advisors and institutions, although this is still “the beginning of a trend.”
“There has been a shift where people are looking at Bitcoin as a potential analogue of a ‘safe haven’,” he said.
In the top manager’s opinion, defining the first cryptocurrency as a “risky asset” is “fundamentally inaccurate” and “largely useless” when considering digital gold in the long term.
“This perception is linked to uncertainty regarding future adoption, regulation, development of the still early ecosystem. It is vastly different from banking crises, geopolitical turmoil, inflation, deficits, debt, currency devaluation—all those fears and risk factors that exist in the world of TradFi,” concluded the expert.
Prospects for SOL-ETF
In a comment for ForkLog, Allbridge.io co-founder Andrey Veliky stated that the successful launch of ETH-ETF sets a precedent and enhances the legitimacy of crypto exchange-traded products based on altcoins. This increases the likelihood of approval for instruments based on other assets like Solana.
Institutional interest in various cryptocurrencies could stimulate the emergence of new strategies, such as index funds. This would allow investors to diversify portfolios and provide a significant boost to the industry, the expert added.
On July 8, Cboe BZX filed form 19b-4 for 21Shares Core Solana ETF and VanEck Solana Trust.
According to the rules, the agency has 240 days to decide whether to approve the rule changes necessary for listing VanEck and 21Shares products on the platform.
According to Bloomberg analyst Eric Balchunas, the SEC might register the instrument in mid-March 2025. The outcome of the US presidential elections in November will be crucial in this regard.
Earlier, similar conclusions were reached by VanEck’s head of digital asset research, Matthew Sigel.
Previously, the possibility of cryptocurrency becoming the basis for the next ETF was suggested by Matrixport co-founder Daniel Yan. Standard Chartered’s head of research, Geoffrey Kendrick, also predicted the emergence of a SOL instrument in 2025.
This view is shared by Ripple CEO Brad Garlinghouse and Galaxy Digital CEO Mike Novogratz.
In June, digital asset manager 3iQ filed an application to register the first Solana-ETF in Canada with a staking reward option (6–8% per annum).
Previously, market maker GSR positively assessed the growth potential of SOL in the event of an ETF launch. According to analysts, the cryptocurrency could increase in value by 1.4–8.9 times.