Just In: Canary Capital Submits Solana ETF Application To US SEC

Canary Capital, a crypto-focused investment firm founded by former Valkyrie Funds co-founder Steven McClurg, has filed for a Solana (SOL) spot exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC).

This new development comes amid a surge of applications from various asset managers aiming to introduce cryptocurrency-backed ETFs on traditional exchanges. If approved, the Solana ETF would enable investors to gain exposure to SOL without directly holding the asset.

Canary Capital Solana ETF Application

Canary Capital has been actively seeking approval for several cryptocurrency ETFs. In addition to the Solana ETF application, the firm recently filed for spot ETFs tied to XRP and Litecoin. This series of applications underscores Canary’s strategic focus on creating regulated pathways for investors to access prominent digital assets.

The Solana ETF filing was confirmed through an S-1 registration statement submitted to the SEC on October 30.

The firm emphasized Solana’s active ecosystem and its low transaction fees, which have contributed to a high transaction volume and a growing number of unique addresses on the network. “Solana’s robust DeFi ecosystem has led to strong sustained on-chain analytics as measured by transactions per day,” Canary Capital noted in the filing.

Growing Interest in Solana-Based ETFs

Canary Capital is not the first to propose a Solana-focused ETF. In June, asset manager VanEck also submitted a filing for a Solana ETF. VanEck’s Head of Digital Assets Research, Matthew Sigel, stated that SOL functions similarly to other commodities like Bitcoin and Ether.

However, the SEC previously classified SOL as a security in its 2023 case against Binance, creating regulatory uncertainty.

As crypto ETFs gain traction, the SEC has already approved multiple spot Bitcoin and Ethereum ETFs earlier this year. Many industry analysts believe that the increasing demand for these crypto ETFs reflects a broader movement within the financial sector to provide traditional investment avenues for digital assets.

Potential Market Impact of a Solana ETF

If approved, the Solana ETF could potentially boost SOL’s market adoption and trading volume. A Solana-backed ETF would enable institutional and retail investors to gain price exposure to SOL through traditional brokerage accounts, increasing its accessibility. Given Solana’s active decentralized finance (DeFi) ecosystem, an ETF could also draw more interest to its underlying blockchain technology.

Several industry analysts have noted that the outcome of the upcoming U.S. presidential election could influence the regulatory environment for crypto ETFs.

During a recent conference, Bloomberg Senior ETF Analyst Eric Balchunas suggested that a Trump administration might appoint an SEC chair more open to cryptocurrency, while a Harris administration could maintain the current regulatory approach. Balchunas added,

“If you see a Trump victory, watch this space, and if you see a Harris victory, just forget about it for a couple of years.”