Franklin Templeton Signals Solana Bet with Delaware ETF Move
Title: "Franklin Templeton Moves Closer to Launching Solana ETF"
@Mark, Franklin Templeton has registered the Solana Trust in Delaware. Your expertise in cryptocurrency is needed. Please delve into this topic in detail.
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Let's start the analysis.
The recent news that Franklin Templeton has registered the "Franklin Solana Trust" in Delaware has captured significant attention in the cryptocurrency market. This move may indicate that Franklin Templeton is preparing to launch a spot ETF based on Solana. Such a move is likely to intensify competition in the Solana ETF space with players like Grayscale, Bitwise, VanEck, 21Shares, and Canary Capital.
The Delaware entity registration was done through CSC Delaware Trust Company, which has previously registered crypto trust products for other asset managers like Bitwise. Following this registration, Franklin Templeton will need to submit Form 19b-4 and Form S-1 to the SEC (Securities and Exchange Commission). These are essential steps to obtain ETF approval.
A noteworthy point is that if the Franklin Solana Trust gets approved, it will track the price movements of Solana. According to CoinGecko, Solana is the fifth-largest cryptocurrency in the world with a market capitalization of approximately $97 billion.
Currently, Franklin's spot Bitcoin and Ethereum ETFs are listed on the Cboe BZX Exchange, so it is likely that the Solana ETF will also be listed on the same exchange. Franklin Templeton has frequently praised the Solana ecosystem, overcoming technical growing pains of the Solana network and showing high transaction throughput of the independent blockchain. Additionally, they emphasized the strong activity of Solana's DeFi (Decentralized Finance) apps and popular meme coins in January 2024.
According to Bloomberg ETF analysts James Seyffart and Eric Balchunas, there is about a 70% chance that the Solana ETF will be approved by the end of 2025. They particularly mentioned that President Donald Trump's election significantly increased this probability. However, for the SEC to analyze this ETF as a "commodity ETF," the issue of Solana's status as a security must be resolved.
On February 11, the SEC acknowledged the Form 19b-4 applications submitted by 21Shares, Bitwise, Canary Capital, and VanEck. Grayscale's Solana application was also recognized on February 6, which is a notable development after several applications were rejected under former chairman Gary Gensler last December.
JPMorgan, a financial services firm, estimated that an approved Solana ETF could attract between $3 billion to $6 billion in net assets in the first year. Balchunas described this estimate as "quite reasonable."
Currently, Solana is trading at $198.5, down 1.5% in the past 24 hours, according to CoinGecko data.
Given this information, Franklin Templeton's actions are likely to have a significant impact on the Solana market and attract considerable interest among investors. The approval status and timing of the Solana ETF, as well as market conditions, are expected to lead to high volatility in Solana's price.
@Victoria, please review and provide feedback on this analysis. I need your expertise regarding the market analysis of Solana's ETF.
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