North America’s First Solana ETF is on the Table

3iQ has already launched Bitcoin and Ethereum funds in Canada. The country has had Bitcoin and Ethereum funds since 2021, much before the US approved the listing of futures crypto ETFs.  

The crypto world is set to experience the debut of another cryptocurrency exchange-traded fund (ETF).  3iQ Corp., a leading digital asset management firm based in Canada, has filed a prospectus with securities regulators to launch a Solana ETF in all provinces and territories of Canada, except Québec. 

The press release mentioned that 3iQ will list the Fund under the ticker "QSOL" on the Toronto Stock Exchange ("TSX"), the country’s leading stock exchange.

“3iQ Corp. is pleased to announce that we have submitted a preliminary prospectus for The Solana Fund (QSOL) in Canada in relation to an initial public offering.

This continues our track record of innovation, and if receipt of applicable regulatory approvals is obtained, the… pic.twitter.com/7ghv05f8gU” — 3iQ Digital Asset Management (@3iq_corp) wrote.

 

The company aims to help investors monitor SOL's daily fluctuations and provide them with a way to compound their investment and earn rewards from staking yields. It further claims that the fund will stake SOL to earn rewards and will be the first Solana ETF to be listed in North America.  

The fund’s agent will be Canaccord Genuity Corp, and it will have two custodians: the Tetra Trust Company and the Coinbase Custody Trust Company, LLC. Greg Benhaim, Senior Manager of Trading at 3iQ, said:  

"3iQ seeks to set a global standard of excellence and we're proud to work closely with the securities regulatory authorities to responsibly enhance the digital asset investment landscape in Canada.”  

 

3iQ has already launched Bitcoin (BTC) and Ethereum (ETH) funds in Canada. The country has had Bitcoin and Ethereum funds since 2021, much before the US approved the listing of futures crypto ETFs.  

Is It an ETF or Simply “a mountain of popularity”?  

Senior Bloomberg ETF analyst Eric Balchunas was not pleased with 3iQ’s classification of the Solana Fund as an ETF or exchange-traded product (ETP). Balchunas argued on X that the fund cannot be called an ETF or ETP since it has no daily creation/redemption process. He added that 3iQ is trying to bet on ETFs’ “mountain of popularity and good will” while not meeting the criteria to qualify as an ETF.  

Solana is the fifth largest cryptocurrency, with a market capitalisation of $58 billion, with the token SOL/USD trading at $127.08 at the time of writing.  

Source: SOL/USD trading chart, BitDelta  

Why a Solana ETF approval is important?  

If 3iQ’s application for the Solana fund is approved in Canada, it could lead to greater adoption of Solana and the global crypto economy, given the increased focus on cryptocurrency ETFs.  

Cathie Wood, CEO of ARK Invest, has expressed her optimism about the chances of having a Solana ETF in the U.S. after the approval of Ethereum ETFs. Ripple’s CEO Brad Garlinghouse also believes there is a chance for Solana ETFs, even though he understands there is a lot of regulation to pass through.  

However, not everyone is as optimistic as the above-mentioned. Rob Marrocco of Cboe, a big name in ETF listings, is not sure that Solana-based ETFs will come in the near future because there is no futures market for Solana to trade on.  

Solana ETFs Move Closer to Reality

Cboe is on the way to listing Solana ETFs in the U.S. market due to the Vest Wallet integration. The exchange has recently submitted a request to the SEC to list Solana ETFs by VanEck and 21Shares. This drive is powered by the rising adoption of Solana, the third most traded cryptocurrency after Bitcoin (BTC) and Ethereum (ETH).  

Rob Marrocco, the Head of Global ETP Listings at Cboe, said:  

"We're seeing increasing investor interest in SOL, and this filing reflects our commitment to providing innovative and efficient products that meet those needs."

This application follows Cboe’s recent success in listing the first U.S. Spot Bitcoin ETFs, which shows the exchange's critical role in the rapidly growing cryptocurrency market. VanEck and 21Shares have filed S-1 forms for approval with the SEC, which is important for the launch of any new product in the U.S. The SEC now has 240 days to decide on the application.  

The company's S-1 filing provides information on the investment strategy and risks associated with the proposed ETFs. Even though Solana is currently in the spotlight, Cboe is not new to the cryptocurrency ETF market.  

In May 2024, the SEC approved the exchange's rule changes to enable it to list Ether ETFs. However, such products generally require two levels of approval, and they have yet to get the nod from the SEC. Analysts think listing Solana ETF can greatly increase the cryptocurrency's liquidity, as the introduction of Spot SOL ETFs is expected to create over $3 billion in investments.

The market, investors, and the entire crypto community await the SEC's decision on Cboe's permit application. If approval is granted, it would boost Solana's institutional acceptance and encourage other exchanges to follow suit.