JPMorgan Doubts SEC Will Approve Solana ETFs

Amid the evolving landscape of cryptocurrency regulations, JPMorgan has expressed skepticism regarding the potential approval of Solana and other crypto exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC). This comes in the wake of the SEC’s recent nod to Ethereum ETFs, stirring discussions within the financial sector.

Nikolaos Panigirtzoglou, the managing director and global market strategist at JPMorgan, emphasizing the bank’s reservations. “We doubt. The decision by the SEC to approve ETH ETFs is already stretched given the ambiguity about whether Ethereum should be classified as security or not. We don’t think the SEC would go even further by approving Solana or other token ETFs given the SEC has stronger (relative to Ethereum) opinion that tokens outside bitcoin and Ethereum should be classified as securities,” he stated.

The approval of spot Ethereum ETFs last week came as a surprise to many. The SEC sanctioned the 19b-4 forms for eight spot Ethereum ETF applicants — including major players like Grayscale, Bitwise, BlackRock, and others — in a single comprehensive order. This decision has been perceived by some analysts as politically motivated, particularly due to the SEC’s abrupt re-engagement with stakeholders after a prolonged period of stalled discussions.

While there is no current legislation in the U.S. that redefines most cryptocurrencies as non-securities, Panigirtzoglou noted that such a development could pivot the SEC’s stance on approving more diverse crypto ETFs.

On the other hand, the landscape might still be shifting. Following the SEC’s unexpected move, some analysts remain optimistic about the future of crypto ETFs linked to other digital currencies. Geoffrey Kendrick of Standard Chartered Bank suggested the possibility of Solana and XRP ETFs getting the green light by 2025. Similarly, Jaret Seiberg from TD Cowen anticipated the introduction of a “basket of crypto tokens” ETF within the next year.

While JPMorgan maintains a cautious outlook on the approval of new crypto ETFs beyond Ethereum, the dialogue among financial institutions and market analysts suggests that the sector might continue to evolve, potentially broadening the spectrum of recognized crypto ETFs in the near future.