Altcoin ETFs Face Challenges, Says Sygnum Bank

YEREVAN (CoinChapter.com) – Solana, Cardano, and other altcoins may struggle to gain approval as spot exchange-traded funds (ETFs) in the United States. Katalin Tischhauser, head of investment research at Sygnum Bank, shared concerns similar to other commentators about the likelihood of these assets joining Bitcoin and Ethereum as spot crypto ETFs.

SEC Approval Hindered by Lack of Regulated Trading Venues

The Securities and Exchange Commission (SEC) has strict requirements for approving ETFs. Tischhauser explained that a major issue is the lack of regulated trading venues that the SEC deems acceptable for market surveillance. The SEC aims to protect against market abuse, fraud, and manipulation by monitoring the underlying market through regulated venues like the Chicago Mercantile Exchange (CME). However, current crypto exchanges are viewed as “unregulated securities exchanges,” making them unsuitable for the SEC’s standards.

For Bitcoin and Ethereum, the availability of CME futures provided a solution to this problem. However, other altcoins do not have similar infrastructure, which complicates their chances of ETF approval.

Low Interest in Altcoin ETFs Expected Despite Bitcoin and Ethereum’s Popularity

Even if approved, the demand for altcoin ETFs might be low. Tischhauser noted that beyond Bitcoin and Ethereum, there might not be much interest in ETFs for other tokens. She pointed out that Ethereum is already less known than Bitcoin, and other tokens like Solana are even less recognized outside the crypto market.

Spot Bitcoin ETFs have seen significant inflows, with $17.7 billion invested. In contrast, spot Ether ETFs initially saw net outflows, partly due to investors leaving the Grayscale Ethereum Trust (ETHE). The Grayscale Solana Trust (GSOL) currently manages $78.6 million, a small fraction compared to the ETHE’s $6.3 billion in assets under management.

VanEck’s Matthew Sigel Argues for Broader Altcoin ETFs, Citing European Success

Matthew Sigel, head of digital assets research at VanEck, offered a different perspective. He disagreed with the idea that only Bitcoin and Ethereum would be viable for ETF approval. He mentioned that Europe already offers a range of crypto ETPs, including options for single coins and baskets. VanEck has also filed for a Solana ETF with the SEC, showing their intent to expand the ETF market.

This situation highlights ongoing discussions within the investment community about the future of altcoin ETFs.

The post Altcoin ETFs Face Challenges, Says Sygnum Bank appeared first on CoinChapter.