Solana experienced its most significant surge in over a month on Thursday after fund manager VanEck filed an application to launch an ETF for the token. Meanwhile, Ether has outperformed Bitcoin this year as final approvals for funds focused on the cryptocurrency draw closer.
At the start of 2024, Bitcoin dominated the headlines with the launch of the first US spot ETFs for the largest digital asset. Products from major firms like BlackRock Inc. and Fidelity Investments saw large inflows, pushing Bitcoin to a record high of $73,798 in March. However, both demand and price have since cooled.
Last month, the US Securities and Exchange Commission (SEC) approved stock exchange proposals to list spot-Ether ETFs, with some reports suggesting final approvals could arrive as early as next week.
Ether ETFs Outlook
Analysts are challenging the subdued expectations surrounding demand for ETFs holding Ether, the second-largest cryptocurrency. Galaxy Digital Holdings LP and Fundstrat Global Advisors LLC project that US vehicles may attract $5 billion in net inflows within the first five months.
“Sentiment around the Ether ETF launch is far too bearish,” wrote Sean Farrell, Head of Digital Asset Strategy at Fundstrat. He anticipates a boost from hedge funds engaging in the basis trade, which exploits discrepancies between the spot and futures markets.
Ether has risen 51% since the beginning of the year, surpassing Bitcoin’s 45% gain. Solana, also known as SOL, had already surged 754% over the past 12 months before Thursday’s gains, ranking as the fifth-largest digital asset.
Since their January listing, US Bitcoin ETFs have attracted $14.5 billion in net inflows. JPMorgan Chase & Co. strategists estimate that prospective Ether portfolios could see a “modest” $1 billion to $3 billion in net inflows for the remainder of 2024.
SEC Stance
The SEC’s recent pivot towards approving spot-Ether ETFs follows its reluctant acceptance of Bitcoin funds after a court reversal in 2023.
While Bitcoin is categorized as a commodity, SEC Chair Gary Gensler contends that most other tokens are unregistered securities requiring regulatory oversight. Gensler has been unclear about whether Ether falls into this category.
Solana, among more than a dozen coins labeled as unregistered securities in various SEC lawsuits, faces regulatory hurdles. This raises doubts about the approval of Solana ETFs, despite filings like VanEck’s.
As of 12:10 p.m. Friday in Singapore, Bitcoin rose approximately 0.5% to around $61,700. Ether edged up to $3,453, while Solana dipped 1.5% to $147.
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