Why BlackRock is reluctant to invest in a Solana ETF

Discussions about Solana as a potential ETF candidate have been gaining traction, especially after VanEck and 21Shares filed for a Solana ETF in the U.S.

Furthering this agenda, Solana’s backers argue that it is a faster and cheaper alternative to Ethereum, with impressive scalability and low transaction fees. This has led to a surge in on-chain activity, further fueling the narrative that Solana is the next big thing in the crypto space.

However, despite its technological advancements and growing market cap (currently at just over $84 billion, according to CoinGecko), Solana still faces significant hurdles.

It lacks CME futures, an issue that would complicate regulatory approval for a cryptocurrency-based ETF. Without these futures, the Solana ETF market would lack important hedging and price discovery mechanisms, making it difficult for the ETF to operate effectively.

Additionally, while Solana has received attention and praise from entities such as Franklin Templeton, which called it an “exciting and significant development,” it still lacks the widespread institutional support enjoyed by Bitcoin and Ethereum.