Solana ETF Filings are in Full Swing: SOL vs SOL ETF and More

As a seasoned investor who has navigated the turbulent waters of traditional markets for years, I’ve always been intrigued by the new frontier that is the cryptocurrency world. Recently, I found myself pondering the question: Should I buy Solana (SOL) directly on an exchange or opt for a Solana Exchange-Traded Fund (ETF)?

21Shares and VanEck have formally asked the Securities and Exchange Commission (SEC) for approval to launch a Solana-based exchange-traded fund (ETF). They submitted two requests with the SEC on Monday, asking for permission to list these Solana-backed products. Once the SEC receives and acknowledges the filings, they have up to 240 days to make a decision about the ETFs.

As an analyst, I’m sharing that Rob Marocco from Cboe Global Markets has noted a surge in investor interest towards Solana, one of the busiest cryptocurrencies after Bitcoin and Ether, following our successful listing of U.S. spot Bitcoin ETFs and receiving SEC approval for rule filings to list spot Ether ETFs. We’re currently focusing on addressing this growing demand for Solana.

Presently, Cboe hosts listings for six out of the ten currently available spot Bitcoin ETFs, such as those from Fidelity, Ark/21Shares, and VanEck. Should additional spot Ether ETFs secure approval, Cboe will serve as their listing platform as well.

Experts in the industry expect that the Securities and Exchange Commission (SEC) will shortly give its approval for Solana ETFs, as several issuers have recently submitted updated S-1 forms on both Friday and Monday. However, there might be more adjustments to come since the latest submissions do not disclose fee details yet.

In June, VanEck and 21Shares each submitted an S-1 form, which is required when introducing a new financial product for sale. Additionally, they filed a Form 19b-4 to inform the Securities and Exchange Commission (SEC) of a proposed rule change by a self-regulatory organization.

What does it mean for SOL price?

As the price of SOL on Gate.io stands firm above $138 SOL/USDT, the chances of the Solana token being incorporated into ETFs is looking extremely promising. If accepted, this move would grant Traditional Finance institutions access to the native SOL token, allowing them to purchase and trade it. This could potentially propel SOL to a new all-time high (ATH), surpassing its previous record of $258 which it reached in 2021.

In other words, if applications for ETFs (Exchange Traded Funds) are not approved, this does not necessarily mean the end for Solana. The network itself remains active, with a significant increase in activity related to new NFTs and now expanding into meme coins as well, serving as a launchpad for further growth.

While it’s important to note that Solana isn’t flawless, it does have its share of issues. Fortunately, a large group of developers are working hard to address these problems within the blockchain community. With appropriate improvements, we can expect Solana to overcome instances where the network experiences failures and requires resets.

What is Solana?

Solana is a blockchain system specifically built for hosting decentralized applications (dApps) and digital currencies, which was established by Anatoly Yakovenko in 2017. His aim was to design a blockchain that would outperform existing networks like Bitcoin and Ethereum in terms of scalability and efficiency. Solana’s innovative structure enables it to handle transactions faster and cheaper than its predecessors, positioning it as a potential front-runner in the competitive blockchain market.

As a crypto investor, I find Solana’s technology fascinating due to its unique consensus mechanism, Proof of History (PoH). This system is all about maintaining a chronological timeline of events within the blockchain, which boosts the network’s efficiency and capacity significantly. Alongside its Proof of Stake (PoS) system, PoH secures the network, validates transactions, and generates new blocks. The synergy between these two systems allows Solana to process thousands of transactions per second with lightning-fast block times of 400 milliseconds and incredibly low fees that barely reach a few cents.

The robust performance and affordable pricing offered by Solana have drawn in a lively community of developers and projects. This diverse ecosystem includes DeFi platforms, NFT marketplaces, numerous other dApps, and more. Solana’s ability to scale effortlessly allows it to handle substantial expansion without sacrificing speed or cost, which makes it an appealing choice for both developers and users alike.

Beyond this, Solana’s system is fortified by a vigorous community and a group of validators who ensure the blockchain’s security. The Solana Foundation, a non-profit entity, significantly contributes to the platform’s continuous growth and visibility. Solana stands as a promising platform for the future of decentralized applications due to its inventive strategy and impressive performance statistics. However, whether it will indeed deliver on its potential is yet to be determined.

How to buy SOL?

Purchasing Solana (SOL) is a hassle-free task, particularly on digital currency exchanges such as Gate.io. This platform is renowned for its user-friendly interface and offers easy access to numerous cryptocurrencies, including Solana. Here’s an easy guide that walks you through the steps of buying Solana:

To get started, navigate to the Gate.io website and sign up by clicking the “Sign Up” button. You’ll be prompted to enter your email address and create a password. Once you do this, check your inbox for a confirmation link and click on it to verify your new account. For enhanced security, consider enabling two-factor authentication (2FA) after verifying your account.

Once your account is safely set up, the following action involves adding funds. Gate.io offers multiple ways to do this, such as cryptocurrency deposits and in certain areas, fiat currency deposits through bank transfers or credit cards. To proceed with the deposit, go to the “Wallet” section, click on “Deposit,” then opt for your preferred method. For crypto deposits, move your coins from your wallet into the deposit address given by Gate.io. For fiat deposits, follow the instructions displayed on your screen to finalize the transaction.

As an analyst, after funding my account, I navigate to the trading section of Gate.io, either through “Markets” or “Trade.” There, I look for my preferred Solana trading pair, such as SOL/USDT, and select it. This leads me to the trading interface where I can execute an order. If I wish to purchase Solana at the current market price, I opt for the ‘market order’ option, input the amount of SOL I desire, and confirm the transaction. Alternatively, if I prefer a specific price point, I select the ‘limit order’ option, set my desired price, and place the order, which will be executed once Solana reaches that predefined price.

Once the transaction is done, your Solana tokens will appear in your Gate.io account’s wallet. You have the option to leave your SOL on this platform for convenience or move it to an external wallet for enhanced safety.

Buying SOL vs Buying SOL ETF

Investing in Solana (SOL) directly through an exchange or opting for a Solana Exchange-Traded Fund (ETF) represents two separate avenues, each boasting unique benefits and factors to weigh. Let’s delve into their key contrasts:

Buying Solana on an Exchange

Acquiring Solana from an exchange like Gate.io gives you the actual cryptocurrency, making you its owner with total authority. This allows you to move it to your private wallet, trade it, utilize it within decentralized apps, or keep it for potential future growth.

Experiencing Real-Time Connection: Buying Solana (SOL) coins allows you a real-time connection to the fluctuations in Solana’s worth. When Solana’s value rises, so does the worth of your investment, and if its value decreases, the same goes for your holdings.

Using SOL provides you access to the Solana network ecosystem. With it, you can cover transaction costs, take part in staking for incentives, and interact with a variety of decentralized apps (dApps) constructed within the Solana system.

Risk and Security: Direct ownership requires you to manage the security of your assets. This includes safeguarding private keys and possibly using hardware wallets to protect your investment from hacks and theft.

Buying Solana as a Solana ETF

Instead of Owning Solana Directly: When you invest in a Solana ETF, you’re essentially buying shares of a fund that mirrors the price of Solana. The ETF contains Solana or assets related to Solana, and its worth is tied to the performance of these assets. What you actually own are shares, not the underlying Solana tokens themselves.

Ease of Access: ETFs are traded on traditional stock exchanges, making them accessible through standard brokerage accounts. This can be convenient for investors who are more comfortable with traditional financial markets and may not want to navigate the complexities of cryptocurrency exchanges.

As a crypto enthusiast, I’ve been considering expanding my portfolio to include Solana Exchange Traded Funds (ETFs). These funds could provide a mix of various crypto assets or investments linked to Solana, offering a broader scope and reducing the risk that comes with investing in just one cryptocurrency. Plus, the professional management these ETFs offer can help mitigate potential risks, making my investment journey smoother and more secure.

Regulation and Security: ETFs are subject to regulatory oversight and are managed by financial professionals. This can provide an added layer of security and confidence for investors who are concerned about the regulatory and security issues associated with direct cryptocurrency ownership.

Tradeability and Operating Times: Exchange-Traded Funds (ETFs) can be bought or sold within standard business hours, offering a higher level of tradeability and ease due to the consistent availability of liquidity compared to cryptocurrency markets, which are open around the clock but may occasionally encounter liquidity challenges.

Summary

Buying Solana Directly from the Exchange: Gives you immediate ownership and management rights over Solana, enabling you to fully engage in the Solana network’s activities.

Investing in a Solana ETF provides an indirect, regulated, and brokerage-accessible method to invest in Solana, without granting direct ownership or usability of the cryptocurrency. Deciding whether to buy Solana outright or invest in a Solana ETF should consider your investment objectives, risk appetite, and familiarity with handling digital assets.

2024-08-09 10:43