In a recent interview with Bloomberg TV, Samara Cohen, BlackRock’s chief investment officer for ETFs and index investments, revealed that Bitcoin and Ethereum are the only cryptocurrencies that currently meet the criteria for being traded through exchange-traded funds (ETFs). According to Cohen, no other digital assets are close to meeting the standards required by BlackRock for inclusion in ETFs.
Cohen highlighted that despite the technical challenges involved in launching new ETFs, the demand for ETFs based on cryptocurrencies other than Bitcoin and Ethereum, such as Solana, is currently lacking. “We really look at the investability to see what meets the criteria, what meets the bar to be delivered in an ETF,” Cohen explained. “For us, both in terms of investability and also what we hear from our clients, Bitcoin and Ethereum definitely meet that bar, but it will be a while before we see anything else.”
The Ethereum ETF Success and Future Speculations
Last week saw the successful launch of Ethereum ETFs, which boosted the trading volume of crypto funds to over $14.8 billion, the highest since May. This success has sparked discussions about what might follow, with Solana emerging as a potential candidate for the next cryptocurrency ETF.
Despite Solana’s potential as a faster and cheaper alternative to Ethereum, there are significant obstacles to its inclusion in ETFs. One major hurdle is the lack of Solana futures on the Chicago Mercantile Exchange (CME), unlike Bitcoin and Ethereum, which is a critical factor for the Securities and Exchange Commission (SEC) in approving a Solana ETF.
Fund manager Franklin Templeton has expressed optimism about Solana, calling it an “exciting and major development that we believe will drive the crypto space forward.” However, until the necessary market infrastructure, such as CME futures, is in place, Solana’s chances of being included in an ETF remain uncertain.
Solana’s Market Position
Solana currently holds about 3% of the total value of the cryptocurrency market, with a market capitalization of $82 billion, according to CoinGecko data. Despite its promising features and growing support from influential financial entities, Solana needs further developments to match the standards set by Bitcoin and Ethereum for ETF inclusion.
In conclusion, while Bitcoin and Ethereum have firmly established themselves as the leading cryptocurrencies for ETFs, other digital assets like Solana still have a long way to go. BlackRock’s cautious approach and stringent criteria ensure that only the most reliable and in-demand cryptocurrencies make it to the ETF market, ensuring stability and confidence for investors.