Brazil Approves First Solana Spot ETF, Sparking Rapid Surge in SOL Price

Brazil’s Securities and Exchange Commission (CVM) has become the first regulator to approve the Solana spot ETF. The exchange-traded fund is offered by QR, which previously managed Bitcoin and Ethereum spot ETFs, and will be managed by Vortx.

Due to regulatory reasons, this Solana spot ETF still needs to be approved by the B3 exchange, and the review time is up to 90 days. Therefore, we can expect to see the first Solana spot ETF listed this year.

SOL price rises

The news stimulated the price of Solana token (SOL), which rose 5% to $155.9 at the time of reporting.

US Solana spot ETF prospects

The Chicago Board Options Exchange (Cboe) submitted two 19b-4 documents to the US Securities and Exchange Commission (SEC) in early July, applying for VanEck and 21Shares to launch Solana spot ETFs. This application has attracted widespread attention in the market.

Main Challenges

• Decentralization Issues：Currently, institutions hold a large amount of Solana, and the history of Solana's price plummeting due to the previous FTX incident may cause Solana to be considered insufficiently decentralized and thus identified as a security.

• SEC Regulatory Challenges：Bitcoin and Ethereum have hard power in the crypto market that is difficult for other projects to replicate. If the SEC approves the Solana ETF, it may face pressure to apply for thousands of other public chains, resulting in too many cryptocurrency ETFs in the market. Therefore, regulators need to develop a viable solution, which may take years.

• Lack of SOL Futures ETF：Based on the history of Bitcoin and Ethereum spot ETFs, the market usually needs to have a futures ETF before applying for a spot ETF. Cboe Vice President Rob Marrocco once said that without first establishing a futures market or changing regulatory conditions, cryptocurrency ETFs other than Bitcoin and Ethereum would not be possible.

Brazil's approval of the Solana spot ETF marks an important development in the cryptocurrency market. However, challenges such as decentralization, regulation, and futures ETF support faced by the U.S. market may make the launch of the Solana spot ETF face complex obstacles.