BlackRock’s Crypto Head Is Sceptical Of Solana And XRP ETF Approvals

BlackRock’s Head of Digital Assets, Robert Mitchnick, has tempered expectations for the launch of Solana and XRP exchange-traded funds (ETFs). He cited concerns over the assets’ maturity, liquidity, and regulatory clarity as the reason behind his skepticism.

 “I don’t think we’re going to see a long list of crypto ETFs,” Mitchnick said. “If you think of Bitcoin, today it represents about 55% of the market cap. ETH is at 18%. The next plausible investible asset is at, like, 3%. It’s just not close to being at that threshold or track record of maturity, liquidity, et cetera.”

During the first day of the Bitcoin Conference 2024, Mitchnick said that the SEC’s discomfort with spot Ether ETFs that offer staking facilities could delay approval for ETFs based on altcoins like Solana and XRP.

EXPLORE: How to Buy Solana (SOL) – A Beginner’s Guide

Meanwhile, Franklin Templeton Endorses Solana Blockchain

Speculation around a Solana ETF was partly driven by asset management firm Franklin Templeton’s endorsement of the blockchain’s vision and achievements.

In a recent post, Franklin Templeton highlighted Solana’s progress in decentralized finance (DeFi), meme coins, and NFT innovation during the fourth quarter of 2023.

The blockchain also saw the launch of its first institutional fund by Hamilton Lane, a leading firm in alternative assets with over $900 billion under management. Hamilton Lane’s CEO praised Solana’s low latency and high throughput, deeming it ideal for tokenization.

On Solana, we see Anatoly’s vision of a single atomic state machine as a powerful use case of decentralized blockchains, lowering information asymmetry. And we are impressed by all the activity seen on Solana in Q4 2023
-DePIN
-DeFi
-Meme coins
-NFT innovation
-Firedancer

— Franklin Templeton (@FTI_US) January 17, 2024

Despite these endorsements, the altcoin market faces significant hurdles. Critics argue that Solana’s classification as an unregistered security could prevent the SEC from greenlighting any spot fund until legal issues are settled.

In a recent interview, Bloomberg ETF analyst James Seyffart suggested that the political climate, including actions by the Biden administration and responses from the crypto community, played a significant role in the approval to go through.

Beyond Bitcoin and Ethereum, the approval of other crypto ETFs, including Solana, is unlikely without significant regulatory changes, Seyffart said. He noted that a regulated market is needed to monitor these assets for fraud and manipulation.

EXPLORE: Best Solana Presales and ICOs 2024

Solana Could Become Next Crypto To Have Spot ETF?

In contrast, crypto investor and trader Brian Kelly has suggested that Solana could potentially become the next cryptocurrency to have a spot ETF in the US.

In a recent episode of CNBC’s ‘Fast Money’, Kelly, who is also the founder and CEO of the BKCM Digital Asset Fund, posed the question, “The trade now is, who’s next?”

He then suggested, “You’ve got to think about Solana as probably the next one. Bitcoin, Ethereum, and Solana are probably the big three for this cycle.”

Oh weird @cnbc says $SOL is the next ETF.

Hmm, where have I heard that before… pic.twitter.com/aYAedMhcM0

— ◢ J◎e McCann 🧊 (@joemccann) May 22, 2024

It is worth noting that the altcoin market is vibrant, with Solana-based meme coins experiencing notable gains, showcasing the sector’s potential.

Furthermore, VanEck and 21Shares have both filed for Solana ETFs. Both asset managers filed the S-1 with the SEC to launch the new products for Solana in June. The approval of the products would mark the third wave of spot crypto ETFs.

EXPLORE: 10 Best Solana Meme Coins to Buy in 2024

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.