Canary Capital Joins VanEck, 21Shares in Seeking Spot Solana ETF Approval

TLDR

• Canary Capital filed for a spot Solana ETF with the SEC
• The ETF would track SOL’s price through CME’s CF Solana index
• This follows earlier Solana ETF filings by VanEck and 21Shares
• Canary recently filed for spot XRP and Litecoin ETFs as well
• The company was founded by former Valkyrie Funds co-founder Steven McClurg

Canary Capital has submitted an application to the Securities and Exchange Commission (SEC) for a spot Solana exchange-traded fund (ETF), according to documents filed on October 30, 2023.

This marks the third such filing for a Solana ETF, following similar applications from VanEck and 21Shares earlier in the year.

The proposed ETF would track Solana’s price using the Chicago Mercantile Exchange CF Solana index, which serves as a real-time price benchmark.

If approved, the fund would enable investors to gain exposure to Solana through traditional brokerage accounts without directly holding the cryptocurrency.

The filing comes as part of Canary Capital’s broader push into cryptocurrency investment products. Earlier in October, the company filed applications for spot ETFs tracking both XRP and Litecoin, showing their interest in expanding beyond the more established cryptocurrencies like Bitcoin and Ethereum.

Canary Capital’s S-1 registration statement leaves some details undefined, including the identity of the fund’s custodian and its planned ticker symbol. These elements will likely be clarified in future amendments to the filing.

The timing of this application follows the successful launch of spot Bitcoin ETFs in January 2024, which marked a major milestone for cryptocurrency investment products in the United States.

The SEC is also currently reviewing applications for spot Ethereum ETFs, with decisions expected in the coming months.

VanEck and 21Shares submitted their Solana ETF applications on June 27 and June 28, respectively. Additionally, Franklin Templeton has expressed interest in developing a similar product, though they have not yet filed an application.

Canary Capital brings notable expertise to this endeavor through its founder, Steven McClurg. Before establishing Canary, McClurg co-founded Valkyrie Funds and served as managing director at Galaxy Digital under Mike Novogratz.

The company recently launched its first product, the Canary HBAR Trust, on October 1, 2023. In announcing this trust, Canary emphasized its focus on risk management and strategic planning in both active and passive crypto investment products.

Data from the company suggests strong fundamentals for Solana’s network. On October 29, Canary reported that Solana has surpassed both Ethereum and Binance Chain in active address market share, even when including layer 2 solutions in the comparison.

The cryptocurrency’s price showed a slight increase following the ETF filing news, though it remained down 2.3% over the 24-hour period, trading at $174.6 according to CoinGecko data at the time of the announcement.

This filing adds to the growing number of cryptocurrency ETF applications under review by the SEC. The regulatory body has shown increased openness to such products following the approval of spot Bitcoin ETFs.

The proposed fund would operate similarly to existing cryptocurrency ETFs, offering investors a regulated investment vehicle that tracks the underlying asset’s price movements without requiring direct cryptocurrency ownership.

If approved, this ETF would represent another step in the integration of cryptocurrency investments into traditional financial markets, providing investors with a familiar structure for gaining exposure to Solana.

The review process for this application will likely take several months, during which the SEC may request additional information or clarification from Canary Capital.

Market observers note that the SEC’s decision on this application could provide insights into the regulatory body’s approach to spot ETFs for cryptocurrencies beyond Bitcoin and Ethereum.