The Brazilian Securities and Exchange Commission (CVM) has recently approved the launch of the first Solana spot ETF in Brazil and globally. This marks a crucial move since it will be one of the few Solana-based exchange-traded products (ETPs) available worldwide.
The newly authorised Solana ETF will utilise the CME CF Solana Dollar price reference, developed by the Chicago Mercantile Exchange (CME) and Crypto Facilities (CF). This reference aims to provide a standardised price quote for Solana.
Utilising the CME CF Solana Dollar Price Reference
Despite the approval, the ETF is currently in the pre-operational phase and is pending approval from the local stock exchange, B3, according to a report from Exame, a local news outlet. Theodoro Fleury, Chief Investment Officer of QR Asset, expressed pride in this development, stating, “This ETF reaffirms our commitment to offering quality and diversification to Brazilian investors. We are proud to be global pioneers in this segment, consolidating Brazil’s position as a leading market for regulated investments in crypto assets.”
Rising Interest in Solana ETFs
This approval comes in the backdrop of the evolving landscape of cryptocurrency investment products. Earlier in June, Vaneck became the first U.S. asset manager to file for a spot Solana ETF with the U.S. Securities and Exchange Commission (SEC). Shortly after, digital asset management firm 3iQ submitted a similar application for a Solana ETF listed on the Toronto Stock Exchange (TSX) with the Ontario Securities Commission. These filings underscore the growing interest in Solana, even as BlackRock’s chief investment officer for ETF and index investments, Samara Cohen, noted that the current appetite for Solana does not compare to that of Bitcoin or Ethereum. She added that it “would be a while” before investors could expect to see any further crypto-related ETF products from BlackRock.
Brazil’s journey in the domain of cryptocurrency ETFs is noteworthy. The country has previously made significant strides with its crypto-based ETFs, listing Bitcoin and Ethereum ETFs on B3 between 2021 and 2022. Furthermore, in March 2024, BlackRock launched its iShares Bitcoin Trust ETF (IBIT), establishing Brazil as an important market for regulated crypto investment products.
The Future of Solana ETFs and Global Market Implications
In July, Cboe, VanEck, and 21Shares formally applied to the SEC to offer a Solana-based ETF in the U.S. However, that application is still pending approval. The developments in Brazil, particularly the approval of the Solana ETF, are poised to enhance global market competition and could potentially serve as a model for other countries to follow. By pioneering in this area, Brazil is generating substantial interest and offering new opportunities for both local and global investors. The growth of blockchain technology and crypto investments in Brazil might signify a transformation in the nation’s financial markets.
Solana’s Market Performance and Future Prospects
Looking at the current status of Solana, the SOL coin is trading at approximately $148. The Brazilian Spot Solana Fund is expected to initiate trading on Brazil’s B3 exchange within the next 90 days. Scanner official reports indicate that the fund, created by QR Asset and managed by Vortx, will soon begin attracting initial investments from early investors.
Theodoro Fleury also emphasised the significance of this approval, stating the commitment to provide quality and diversification for Brazilian investors, and expressing pride in Brazil’s role as a global pioneer in this sector.
As of the latest updates, while the SOL price has not significantly reacted to the news, it is currently trading at around $143.32 (AU$219.77).
While the new Solana fund represents a world premiere as the first dedicated ETF of its kind, it is important to note that other similar financial products have existed previously. Europe, for instance, has several Solana ETPs that have been trading, such as 21Shares’ ASOL and VanEck’s VSOL.AS.
It’s very important to identify the difference between ETPs (Exchange-Traded Products) and ETFs (Exchange-Traded Funds). Both types of funds can be traded on stock exchanges like shares, but there are differences in their structure and operation. Specifically, all ETFs are considered ETPs, but not all ETPs qualify as ETFs, as they differ in their underlying asset management.
ETFs function in a traditional investment sense by owning the underlying assets they track, meaning shareholders have an indirect ownership stake in these assets. In contrast, ETPs can be structured as debt securities without actually holding the assets they profess to track, merely promising a return linked to their performance.
Due to the previous absence of investment vehicles explicitly for Solana, the U.S. market currently appears not ready to embrace a Solana ETF anytime soon. While VanEck remains optimistic about a potential U.S. launch, other industry leaders such as BlackRock and Katalin Tischhauser from Sygnum Bank have cited a lack of institutional interest beyond Bitcoin and Ethereum as a key reason against launching such products at this time. Stay tuned for more updates on this evolving story on the Turkish NY Radio.
