JP Morgan Skeptical of Solana and Other Crypto ETF Approvals

JP Morgan's managing director and global market strategist, Nikolaos Panigirtzoglou, expressed skepticism regarding the likelihood of regulatory approval for Solana (SOL) and other crypto ETFs. Panigirtzoglou argued that the recent SEC approval of spot Ethereum ETFs is already a contentious decision, given the unclear classification of ETH as a security or commodity.

Despite approving Ethereum ETFs, the SEC's classification of ETH remains ambiguous. Panigirtzoglou believes this lack of clarity raises doubts about the approval prospects for ETFs linked to other assets like Solana.

Panigirtzoglou said the lack of clarity casts doubt on other assets, stating:

“We don’t think the SEC would go even further by approving Solana or other token ETFs.”

Panigirtzoglou noted the SEC's inclination to classify tokens other than Bitcoin and Ethereum as securities, posing a significant obstacle to the approval of SOL ETFs.

SOL ETF Prospects Amid Security Concerns and Regulatory Developments

While some, like crypto investor Brian Kelly, see a potential increase in SOL ETF approval odds following ETH ETF approvals, concerns persist regarding SOL's security status. Bloomberg ETF analyst James Seyffart anticipates the possibility of SOL ETFs succeeding in the future, especially with forthcoming legislation like FIT21, despite acknowledging the challenges posed by Solana's security classification.

Prediction markets indicate a modest chance of SEC approval for a Solana ETF by the end of 2024, with Polymarket reporting approximately a 13% likelihood.

The SEC has previously identified Solana and other altcoins as securities in enforcement cases against various platforms, including Coinbase, Binance, and Kraken. Solana Labs' Simple Agreement for Future Tokens (SAFTs) was highlighted as an example of securities offerings.

JP Morgan's skepticism, coupled with the SEC's historical classification of Solana and other altcoins as securities, suggests significant regulatory hurdles for SOL ETF approvals. Despite some optimism from commentators, challenges remain regarding Solana's security status and the SEC's stance on crypto assets beyond Bitcoin and Ethereum.