First Solana Futures ETFs Start in the USA on Thursday
Solana is gaining a debut on the futures ETFs shelf in the USA. Two ETFs based on Solana aim to further convince the American market of the potential of the cryptocurrency.
Solana (SOL) is the focus of two exchange-traded futures ETFs launching tomorrow, Thursday, in the US. These financial products will be offered by the investment firms Volatility Shares and Bitwise Asset Management. Unlike a classic ETF, a futures ETF does not replicate the actual price trend of SOL but rather the price trend of regulated futures contracts for Solana.
Solana is currently the seventh largest global cryptocurrency by market capitalization, and newcomers are often better represented at Binance rather than at Coinbase or Kraken. The two upcoming ETFs for Solana futures are reportedly targeting institutional investors who want to depend more on US-compliant products linked to SOL, such as investment banks and venture capital firms. But individual investors, who are generally legally allowed to invest in futures and ETFs, can of course also participate.
In practice, futures ETFs without a maximum cap should theoretically better reflect the actual price of Solana over time than, for example, futures ETFs for Bitcoin or Ethereum, which are constrained by specific trading volume limitations relating to futures. However, the effectiveness of such ETFs often depends on the structure of the futures market and the liquidity in specific time periods.
The pending ETFs for Solana will face competition as US investors also have access to direct financial products related to cryptocurrency, such as Grayscale’s Solana Trust or the DeFi Technologies Solana ETP in Europe.
Solana continues to be known primarily as a platform for decentralized finance (DeFi) apps and NFTs. However, users have criticized previous technical failures of the network, which have already caused Solana’s representative on Ethereum, ETH, to overtake it. Despite this, the ecosystem of Solana is generally considered very active and still holds many opportunities.
Still, the futures ETFs that are starting this week could matter less for short-term price speculation on Solana than for providing support for longer-term portfolio inclusion in traditional financial sectors.
As always, the strategies of the competitors should also be considered, and how they try to position themselves in the dynamic crypto industry.
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