SEC postpones ruling on Bitwise and 21Shares’ Solana ETF proposals and initiates public feedback process.

The US Securities and Exchange Commission (SEC) has decided to prolong its examination of two significant proposals for spot Solana (SOL) exchange-traded funds, indicating further delays in the approval of investment products linked to cryptocurrencies.

The agency announced that it would initiate a new phase of assessment to evaluate whether the ETF proposals from asset managers Bitwise and 21Shares align with essential provisions of the Securities Exchange Act.

The SEC raised issues regarding potential market manipulation and the protection of investors, factors that must be considered prior to the approval of any ETF listing.

Bitwise’s application, submitted in January via Cboe’s BZX Exchange, along with 21Shares’ independent proposal, has each experienced at least one postponement.

Both companies possess experience in providing crypto investment products; however, 21Shares currently oversees approved Bitcoin (BTC) and Ethereum (ETH) ETFs. So far, the SEC has not authorized any fund associated with Solana, which is often recognized as a faster, more affordable alternative to Ethereum.

The regulator has expressed the need for further public input and analysis to ascertain if the suggested rule adjustments will meet its criteria for combating fraud and maintaining investor trust.

The agency’s cautious approach indicates that, despite Solana’s growing recognition, the road to ETF approval might be longer than that of its predecessors.

This delay occurs amid a wider regulatory backlog impacting numerous digital asset ETFs. The regulator has recently postponed decisions on various crypto ETFs. Nevertheless, market sentiment remains optimistic.

Analysts from Bloomberg, James Seyffart and Eric Balchunas, have indicated previously that they foresee a strong likelihood of approval for most ETF applications, with a final decision expected in the later part of the year.

They projected a 90% chance of eventual approval for both Solana and Litecoin (LTC) ETFs, attributing their positive outlook to favorable commodity classifications and an increase in institutional interest.

However, with conclusive decisions potentially months away and ongoing policy uncertainties, investors might need to wait until late 2025 for clarity on the status of Solana ETFs in the US markets.