J.P. Morgan believes that Solana and other cryptocurrency ETFs are unlikely to receive regulatory approval

JP Morgan managing director and global market strategist Nikolaos Panigirtzoglou said ETFs for Solana (SOL) and other assets are unlikely to succeed.

In a statement to The Block on May 27, Panigirtzoglou argued that the SEC’s recent decision to approve spot Ethereum ETFs is “long overdue.”

Despite the approvals obtained, it is unclear whether the SEC considers ETH a security or a commodity.

Panigirtzoglou stated that the lack of clarity calls into question other advantages and states:

“We do not believe the SEC would go further by approving Solana or other token ETFs.”

He added that the SEC believes that tokens other than BTC and ETH should be classified as securities, which is a stronger position than for ETH itself.

Panigirtzoglou acknowledged that U.S. lawmakers could create laws classifying most cryptocurrencies as non-securities, but said no such laws existed.

Others expect SOL ETFs

Some commentators are more optimistic about the SOL ETF’s chances.

Crypto investor Brian Kelly believes that ETH ETF approvals could increase the chances of the Solana ETF being approved, but admitted that SOL’s status as a security is an issue.

Bloomberg ETF analyst James Seyffart expects the Solana ETF to see success within a few years thanks to legislation like FIT21 that will define securities and futures markets. Likewise, he viewed Solana’s security status as a potential challenge.

The odds in the forecast market are low. Polymarket reports that the likelihood of the SEC approving the Solana ETF by the end of 2024 is approximately 13%.

The SEC considers SOL a security

Regardless of future treatment, the SEC has previously identified Solana and other altcoins as securities in various enforcement cases.

In its case against Coinbase, the SEC found that Solana was one of many tokens offered as an investment contract and security, both for past and present sales.

The regulator highlighted Solana Labs’ $23 million simple future token (SAFT) deal as one example of an offer and sale of securities. He also called SOL a safeguard in cases against Binance and Kraken.

However, the SEC has not brought enforcement actions directly against Solana Labs or its affiliates.

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