The proposed Solana Fund would offer publicity to SOL staking yields.
3iQ, a veteran digital asset supervisor, has utilized to launch a brand new exchange-traded product (ETP) in Canada.
On June 20, 3iQ introduced it had submitted a prospectus to the Ontario Securities Fee (OSC) to create The Solana Fund, an ETP providing traders publicity to SOL. If authorized, the product would commerce on Canada’s Toronto Inventory Change (TSX) underneath the ticker QSOL.
The fund notably seeks to supply publicity to staking yields generated by the underlying SOL backing the fund’s shares. 3iQ famous that property shall be held in chilly storage by a partnership with Tetra and Coinbase.
“We now have submitted a preliminary prospectus for The Solana Fund (QSOL) in Canada in relation to an preliminary public providing,” 3iQ stated.
Nevertheless, James Seyffart, a Bloomberg ETF analyst, famous that 3iQ’s proposed ETF contains a closed-end fund. Closed-end funds challenge a set variety of shares traded on exchanges, and their costs can diverge from the web asset worth.
“It is going to be extra just like one of many Grayscale belief merchandise, besides Canada’s closed-end funds have mechanisms to stop the reductions or premiums from getting too excessive,” he stated. “3iQ did this with a Bitcoin fund in 2019 earlier than launching ETFs.”
Eric Balchunas, a fellow ETF analyst at Bloomberg, criticized 3iQ for choosing a closed-end design for the fund.“Went from type of a giant deal to nearly completely insignificant,” he stated.
In April 2020, 3iQ was among the many first to checklist a Bitcoin fund and launched a publicly listed Ether Fund in Toronto. They now provide two merchandise, the 3iQ Bitcoin ETF (BTCQ) and the 3iQ Ether Staking ETF (ETHQ) on the TSX, with web property of roughly $224 million and $48.84 million, respectively, based on 3iQ.
Is Solana a candidate for an ETF?
3iQ’s submitting comes as traders are speculating as to which cryptocurrency could change into the third to underpin a spot exchange-traded fund (ETF).
Not like ETFs based mostly on derivatives, spot funds maintain the underlying asset they monitor, driving exerting bullish demand on the asset’s provide. Bitcoin turned the primary cryptocurrency backing a spot ETF in January, whereas spot Ethereum ETFsare anticipated to enter the market by fall.
Whereas Solana has acquired reward from mainstream asset managers together with Franklin Templeton and Customary Chartered, no U.S. agency has pursued plans for a spot Solana ETF thus far.
Nevertheless, asset issuers could also be unlikely to use for a spot Solana ETF any time quickly after the U.S. Securities and Change Fee (SEC) described SOL as a safety asset in its lawsuits towards Coinbase and Kraken final 12 months. As such, there are slim possibilities that the SEC would greenlight an ETF backed by an asset it believes to comprise an unregistered securities asset.
“SEC is not dancing round SOL’s standing like they’ve ETH,” Seyffart tweeted. “These lawsuits towards COIN and Kraken and others flat out say ‘Solana is a safety’.”
The SEC additionally famous the existence of regulated futures ETFs monitoring Bitcoin and Ethereum when approving stated funds, emphasizing that the futures ETFs’ shares have demonstrated a robust correlation to the property’ corresponding spot market costs.
In a June 16 interview, Arthur Hayes, the co-founder of BitMEX, steered that Dogecoin could provide an unlikely contender within the spot ETF race.
“In the event you’re serious about TradFi stepping into crypto, they are going to put an ETF on something they will,” Hayes stated. [DOGE has] a excessive market cap factor, it has been round for some time. It is the unique memecoin… I believe DOGE will get an ETF earlier than the tip of the cycle.
Adam Cochrane, a distinguished web3 influencer affiliated with Synthetix, equally speculated that each DOGE and Litecoin (LTC) could possibly be nicely positioned for an ETF launch.
Nevertheless, Seyffart argued {that a} Litecoin ETF would probably undergo from poor demand, regardless of LTC exhibiting comparable attributes to Bitcoin and Ethereum.
