Based on materials from the website - By Yellow News
Franklin Templeton and Grayscale lead the charge for Solana ETF with staking provisions worth $60 billion
On August 1, seven well-known asset management companies submitted updated applications for Solana exchange-traded funds to federal regulators, resulting from coordinated efforts to obtain approval for cryptocurrency investment instruments. The revised applications from Franklin Templeton, Grayscale, VanEck, and Fidelity include new staking provisions and clearer custody terms following discussions with the Securities and Exchange Commission.
Asset managers have implemented in-kind redemption schemes similar to those approved for existing cryptocurrency ETFs. These changes demonstrate how companies adapt their offerings based on feedback from regulators obtained during the review process.
Market analysts believe that the coordinated timing of these applications indicates an ongoing dialogue between asset managers and representatives of the Securities and Exchange Commission (SEC). The revised applications address issues related to custody conditions and operational mechanisms that regulators noted in previous reviews of cryptocurrency ETFs. Industry observers expect a regulatory decision to be made by the end of August or September 2025. The timelines align with typical review periods for complex financial products that require careful scrutiny from regulators.
SOL is facing critical support levels at $170 and $158, and traders are monitoring these levels for potential breakout signals. Sustained movement above $180 could restore bullish sentiment among technical analysts.
Exchange-traded funds (ETFs) are investment instruments that track underlying assets when traded on traditional stock exchanges. Cryptocurrency ETFs allow investors to access digital assets without directly purchasing or holding the tokens themselves. These products provide regulated access to cryptocurrency markets through registered brokerage accounts.
Staking is the process of locking cryptocurrency tokens to support the network's operations and earn rewards. Solana's proof-of-stake (PoS) consensus mechanism allows token holders to delegate their assets to validators and receive periodic payouts.
The inclusion of staking provisions in ETF applications determines how fund managers will handle these rewards.
In-kind redemption mechanisms allow large institutional investors to exchange ETF shares directly for underlying assets rather than cash. This mechanism helps maintain efficient pricing and reduces tracking error between the ETF share price and the value of the underlying assets.
The revised documents represent an important institutional validation of the Solana ecosystem. With over $60 billion in staking SOL tokens, the network demonstrates significant institutional participation and technical maturity. Asset managers view this staking activity as evidence of the network's stability and long-term viability.
Approval of the ETF will provide regulated access to investments for pension funds, target funds, and other institutional investors that are currently prohibited from directly purchasing cryptocurrency. These institutions manage trillions in assets and could create substantial new demand for investments in Solana. This development will enable Solana to stand alongside Bitcoin and Ethereum as a primary option for institutional investments.
Regulatory approval will also create a clearer legal framework for Solana-based financial products. This clarity could stimulate the development of additional products and institutional adoption in the cryptocurrency sector.
A coordinated strategy for submitting ETF applications demonstrates growing confidence among institutional investors in the long-term prospects of Solana, despite short-term price volatility. While obtaining regulatory approval remains uncertain, the updated applications address key issues of concern to the SEC and align with established approval precedents. Market observers will closely monitor regulatory developments as the application review process progresses until the end of 2025.
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