BlackRock says Solana isn’t mature enough yet to justify launching a new investment product.
BlackRock has confirmed it has no plans to launch a Solana (SOL) ETF anytime soon, despite the roaring success of its Bitcoin and Ethereum spot ETFs launched this year.
The company’s dismissal of small-cap altcoins leaves room for other asset managers to compete in this area, with some already filing to launch the product.
BlackRock’s Take On A Solana ETF
During a Tuesday interview with Bloomberg, BlackRock CIO Samara Cohen said a BlackRock Solana ETF launch is “not in the near term.”
“We really look at the investability – what meets the criteria, what meets the bar to be delivered in an ETF,” Cohen explained. In terms of investability and client demand, she said Bitcoin and Ethereum certainly meet that bar.
“I think it will be a while before we see anything else,” she added.
Thus far, both Bitcoin and Ethereum’s spot ETFs have proven strong successes. BlackRock’s iShares Bitcoin Trust (IBIT) has amassed nearly $20 billion in flows since January 11, and had the best opening 30 days of any ETF in history. After its first week, BlackRock’s Ethereum ETF controls $440 million in ETH, per on-chain data.
Still, the case for launching a Solana ETF is questionable.
At Bitcoin 2024 last week, Robert Mitchnick – BlackRock’s Head of Digital Assets – noted that “the next plausible investible asset is at, like, 3%” of crypto’s total market cap. “It’s just not close to being at that threshold or track record of maturity, liquidity, et cetera.”
Back in March, Mitchnick emphasized that Bitcoin was still the “overwhelming top priority” among crypto-focused clients. “Then a little bit of Ethereum, and very little everything else,” he emphasized.
Can A Solana ETF Really Happen?
In late June, VanEck became the first firm to file for a Solana spot ETF in the United States. The company argued that regulators had little reason to deny them for public trading given that SOL functions much like BTC and ETH as digital commodities, which had already been greenlighted.
“Like Ether on the Ethereum network, SOL can be traded on digital asset platforms or used in peer-to-peer transactions,” said Matthew Sigel, VanEck’s head of digital asset research, at the time.
Unlike BTC and ETH, however, Solana does not yet have a futures market on the CME – a cornerstone of the crypto’s legal arguments for getting Bitcoin spot ETFs approved. The verdict is still out on whether SOL is a security token, with the SEC alleging as much in its Coinbase lawsuit.