JP Morgan Says Solana ETF Expectations Is A Pipe Dream, Here’s Why

Analysts at JP Morgan, an American multinational investment banking company, have tempered the rising expectations of a Solana ETF. They cite the United States Securities and Exchange Commission’s (SEC) recent enforcement actions on the crypto industry as a major barrier to the establishment of a Solana ETF. 

Solana ETF Hopes Dashed By JP Morgan Analysts

JP Morgan has remained doubtful of the potential approval of a Solana ETF by the US SEC. Nikolaos Panigirtzoglou, managing director and global market strategist at JP Morgan, said in a statement to TheBlock, that he was skeptical about the SEC authorizing more cryptocurrency ETFs after it approved Spot Bitcoin ETFs and Ethereum Spot ETFs this year.

Panigirtzoglou dismissed the growing expectations of a Solana ETF, pinpointing the ambiguity surrounding the SEC’s seemingly hostile stance on cryptocurrencies. He disclosed that the regulator’s implied classification of cryptocurrencies as securities could pose a significant challenge to the establishment of a Solana ETF.  “We don’t think the SEC would go even further by approving Solana or other token ETFs,” Panigirtzoglou stated. 

The analyst further affirmed that the SEC will not approve any tokens outside Bitcoin and Ethereum, suggesting that the regulator believes that altcoins other than Bitcoin and Ethereum should be classified as securities. 

Following the approval of Spot Bitcoin ETFs on January 10, many predicted that Ethereum would be the next in line to gain an ETF. True to the prediction, the US SEC recently approved Ethereum Spot ETFs on May 23, after months of delaying multiple applications from several asset management companies, including BlackRock, Fidelity, Bitwise and others. 

Now with Spot Bitcoin ETFs and Ethereum Spot  ETFs approved, expectations for more crypto ETFs are high, with Solana and XRP being the top choice amongst other digital currencies. 

Panigirtzoglou has stated that the only way the SEC would approve a Solana ETF is if the US policymakers passes a legislation deeming cryptocurrencies as non-securities. However, as of today, no such legislation has been approved.  

Standard Chartered Analysts Expect Crypto ETFs By 2025

In another statement to TheBlock, analysts at international cross-border bank, Standard Chartered have maintained a more optimistic outlook on the potential establishment of a Solana ETF. Geoffrey Kendrick, head of forex and digital assets research at Standard Chartered Bank predicted that the SEC could approve other crypto ETFs including a Solana ETF by2025.

He suggested that the approval of an Ethereum Spot ETF indicates that Ethereum is not classified as a security by the SEC. As such, other Ethereum-like cryptocurrencies, such as Solana and XRP, which the SEC previously denoted as securities, may also be categorized as non-securities. 

Kendrick explained that the core technologies of Ethereum and other altcoins in the crypto market are “so similar,” that it would potentially pose a challenge for the SEC to legally claim that the other cryptocurrencies were securities. This similarity could ultimately pave the way for the regulatory agency to consider approving other crypto ETFs.