Solana Congestion Issues Poked As CME Puts Out SOL ETF Hopes

Read Time:3 Minute, 14 Second

Speculations went around that the Chicago Mercantile Exchange (CME) could be planning to offer Solana (SOL) futures. Rumors also emerged that other large financial firms, such as BlackRock, might also be preparing similar moves for Solana-based ETFs.

However, a person familiar with the situation has clarified that CME has no plans to offer Solana a futures fund. This revelation has dampened expectations for a near-term Solana ETF.

CME Puts Out SOL ETF Hopes

Despite the speculative buzz, the CME Group has decided against pursuing a Solana-based futures product. This decision is quite reasonable given the constant assessments that are being conducted within the cryptocurrency derivatives market. James Seyffart, an ETF analyst at Bloomberg, had noted that it could take several years before a Solana ETF emerges, thanks to the regulatory environment of the United States. 

CME HAS NO PLANS TO OFFER SOLANA FUTURES: PERSON FAMILIAR

Source: DB | Coins: SOL

— db (@tier10k) May 29, 2024

He pointed out that an ETF of this nature would require a CFTC-regulated futures market which could be brought about by legislative measures like the FIT21 bill.

In addition, Seyffart also highlighted that the current position of the SEC on Solana as a security only adds more confusion. Unlike Ethereum, which the SEC has not categorically declared as security, Solana, on the other hand, has been categorized as security in the lawsuits against Coinbase and Kraken. This classification poses a major challenge in the creation of a Solana based ETF.

Justin Bons Hints Reason Behind Solana Congestion

At the same time, Cyber Capital’s Justin Bons has shared his opinion on Solana’s operational problems and has debunked the notion of the network being unreasonably unreliable. Bons carried out several tests and concluded that Solana transactions are smooth and efficient, contrary to claims that the Solana network often collapses due to traffic congestion.

5/5) Seriously question any influencer who tells you that SOL is unreliable now

They are either misleading you or are completely ignorant of the true state of SOL

Solana is not perfect; no blockchain is

I am at least thankful that I can cheaply & reliably transact on SOL today

— Justin Bons (@Justin_Bons) May 29, 2024

He explained that the high failure rates are due to bot spam, which the network correctly labels as failed attempts.

Subsequently, some analysts such as Brian Kelly, the CEO of BKCM, has predicted that Solana could be the next token to appear in the US in the form of a crypto-based spot ETF after Ethereum. But other analysts like Nate Geraci from The ETF Store argue that for a Solana spot ETF to become a reality, there must be a Solana futures product on the CME or there should be better and clear regulation of cryptocurrencies.

Is the Regulatory Environment Favourable?

The legal framework is an essential factor for the creation and approval of crypto ETFs. The recently passed FIT21 bill in the House of Representatives enables the CFTC to categorize some altcoins as commodities. If the SEC changes its position regarding the classification of the cryptocurrency in question, this event may create an opportunity for Solana. However, as it is now, the SEC’s clear categorization of Solana as a security is still an issue.

Nonetheless, an analyst at Standard Chartered Bank, Geoffrey Kendrick, has predicted that the SEC may approve ETFs for such cryptocurrencies as Solana, Ripple’s XRP by 2025.

This prediction is based on the recent approval of Ethereum spot ETFs, which may indicate a change in regulatory attitudes. According to Kendrick, the support of cryptocurrencies in the political level in the United States is a decisive moment that can define further actions.

Read Also: XRP Lawsuit: Ripple Files New Reply In Motion To Seal Documents

The post Solana Congestion Issues Poked As CME Puts Out SOL ETF Hopes appeared first on CoinGape.

Leave a Reply

Your email address will not be published. Required fields are marked *