A decision on the Solana ETF applications submitted by Bitwise and 21Shares has been postponed by the SEC, with a public consultation process initiated to gather input and address concerns related to the market.
The review period for two prominent proposals concerning spot Solana (SOL) exchange-traded funds has been extended by the U.S. Securities and Exchange Commission (SEC), indicating additional delays in the approval timeline for investment products connected to cryptocurrency.
It was announced by the agency that a new round of proceedings would be initiated to evaluate whether the ETF proposals submitted by asset managers Bitwise and 21Shares are in compliance with essential requirements of the Securities Exchange Act.
Concerns regarding market manipulation and investor protection were specifically cited by the SEC, as these are factors that are required to be considered before approval can be granted for any ETF listing.
Extended Delay
The application submitted by Bitwise in January via Cboe’s BZX Exchange, along with a separate proposal from 21Shares, has now been postponed at least once for each, according to official filings.
Although both firms possess experience in offering cryptocurrency investment products, Bitcoin (BTC) and Ethereum (ETH) ETFs are already managed by 21Shares. However, a fund associated with Solana—frequently promoted as a more efficient and cost-effective alternative to Ethereum—has not yet been approved by the SEC.
Additional public feedback and further time for analysis are being sought by the regulator to determine whether the proposed rule changes satisfy its criteria for fraud prevention and the protection of investor confidence.
A cautious stance has been conveyed by the regulator, indicating that, despite its growing significance, Solana may encounter a more extended timeline for ETF approval compared to earlier digital assets.
Stalled Regulatory Action
The delay has occurred within the context of a broader regulatory backlog impacting multiple digital asset ETFs. In recent weeks and months, decisions on several cryptocurrency ETFs have been postponed by the regulator. Despite these setbacks, strong optimism continues to persist within the market.
High probabilities of approval for the majority of ETF applications have been previously projected by Bloomberg analysts James Seyffart and Eric Balchunas, with the final authorization expected to be granted during the second half of the year.
A 90% probability of eventual approval for both Solana and Litecoin (LTC) ETFs was estimated by them, with their optimism being attributed to supportive commodity classifications and increasing interest from institutional investors.
However, due to the possibility of final decisions being months from issuance and ongoing uncertainty surrounding broader policy, clarity regarding the approval of Solana ETFs for entry into U.S. markets may not be provided to investors until late 2025.
