SEC Delays Bitwise Decision, 21 Shares Solana ETF Opens Public Consultation

The U.S. Securities and Exchange Commission (SEC) has extended its review of two high-profile Solana exchange-traded fund (ETF) proposals, signaling a further delay in the approval process for crypto-related investment products. The agency said it will initiate a new round of proceedings to assess whether the ETF proposals from asset managers Bitwise and 21shares comply with key provisions of the Securities Exchange Act. Specifically, the SEC cited concerns about market manipulation and investor protection, factors it must weigh before granting any ETF listing. The long wait: Bitwise’s application, which was filed in January through the CBOE’s BZX exchange, and 21Shares’ separate proposal have both been delayed at least once. While both companies have experience offering crypto investment products, 21shares already operates approved Bitcoin (BTC) and Ethereum (ETH) ETFs. The SEC has yet to authorize any funds linked to Solana, the blockchain often touted as a faster and lower-cost alternative to Ethereum. The regulator said it is seeking additional public input and analysis time to determine whether the proposed rule changes will meet its criteria for preventing fraud and ensuring investor confidence. The regulator's cautious tone suggests that Solana, despite its growing prominence, may face a longer road to ETF approval than its predecessors.Regulatory Deadlock: The delay comes amid a broader regulatory bottleneck affecting many digital asset ETFs. The regulator has postponed decisions on several ETFs in recent weeks and months. Nevertheless, optimism remains strong in the market. Bloomberg analysts James Seyfart and Eric Balchunas previously stated that they expect a high chance of approval for most ETF applications, with a final green light expected sometime in the latter half of the year. They estimated a 90% probability of eventual approval for both the Solana and Litecoin (LTC) ETFs, attributing their optimism to favorable commodity ratings and growing institutional interest. However, with final decisions months away and broader policy uncertainty, investors may have to wait until late 2025 for clarity on whether Solana ETFs will make it to U.S. markets.

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