The SEC has recently processed 72 cryptocurrency ETF applications, covering tokens from Solana and XRP to Pudgy Penguins, signaling a positive reception to regulation. However, beneath the hype lies a contradiction: the expectations for a Solana ETF may have been overstated. The price of SOL has fallen below the critical support level of $130, showing a head and shoulders breakdown on the technical front, while open interest in futures has surged by 300%. If the SEC delays approval (there are precedents), highly leveraged long positions may face significant losses. The ETF is merely a liquidity tool; the true ecological activity of Solana is the foundation of its value.

On the other hand, the economic model of the Pudgy Penguins token is questionable. PENGU has dropped 22% this month, and its $2.5 billion market cap is severely disconnected from its tens of millions in annual revenue. If its ETF is approved, it may stimulate liquidity in the short term, but structural issues such as the short lifespan of NFTs and unclear token functions remain unresolved. The current ETF craze is essentially regulatory arbitrage in traditional finance, where institutions package marginal assets as compliant products to charge traditional capital. From previous experiences, the warning we received was that after the approval of Bitcoin futures ETFs in 2021, prices fell by 30%.

I believe that ETFs are a milestone in the mainstreaming of the industry, but they are by no means a cure for value. When cryptocurrency assets become tools for institutional arbitrage, have we strayed from the original decentralization ethos?