The Hong Kong SFC has just approved the first Solana spot ETF, allowing the altcoin to join the ranks of Bitcoin and Ethereum.
ChinaAMC To List First Solana Spot ETF In Hong Kong
As reported by the Hong Kong Economic Times, the Securities and Futures Commission (SFC) has approved the first Solana spot exchange-traded fund (ETF) in Hong Kong. A spot ETF is an investment vehicle that allows investors to gain exposure to an underlying asset without having to directly own it. In the case of a cryptocurrency like SOL, this means that traders can invest without having to hold actual tokens on the blockchain.
Hong Kong approved spot ETFs for Bitcoin and Ethereum in April 2024. The BTC products followed three months after they were approved in the US by the Securities and Exchange Commission (SEC), but the Chinese city led the way with ETH products. The same dynamic appears to be playing out again. With the US government currently facing a shutdown that has frozen SEC operations, Hong Kong’s SFC has beaten the American regulator to approving a Solana spot ETF.
The spot ETF, issued by Chinese asset management company ChinaAMC, is set to launch on October 27th. It will be available in three trading lots: HKD, RMB, and USD. Each is equivalent to 100 tokens of the cryptocurrency. ChinaAMC previously launched Bitcoin and Ethereum spot ETFs on the Hong Kong stock exchange as part of the initial wave of approvals granted by the SFC in April 2024.
Over in the US, several SOL ETF filings are waiting to be processed, but with the current government shutdown, it’s unclear when they will finally be reviewed. Other altcoins like Dogecoin and XRP have also seen their filings similarly delayed.
Speaking of the US spot ETFs, Bitcoin funds witnessed a notable amount of inflows on Tuesday, as data from SoSoValue shows.
The trend in the daily netflow of the BTC spot ETFs over the last few months | Source: SoSoValue
In total, the Bitcoin spot ETFs captured net inflows of about $477 million, breaking the trend of outflows from the last week. Ethereum funds also saw the incoming of capital, but their inflows of $141 million weren’t as significant as those of BTC products.
Looks like ETH also saw net outflows in the preceding few days | Source: SoSoValue
As mentioned before, spot ETFs allow investors to gain exposure to a cryptocurrency’s price movements without directly having to own tokens on the blockchain. For traditional traders unfamiliar with digital asset exchanges and wallets, this quality can make these vehicles a convenient entry point into the asset.
Bitcoin and Ethereum funds were able to tap into a new market in this way, and the same could potentially happen with Solana. That said, it only remains to be seen how demand for SOL spot ETFs will end up looking.
SOL Price
At the time of writing, Solana is trading around $186, down 8% over the last week.
The price of the coin seems to have plunged over the past day | Source: SOLUSDT on TradingView
Featured image from Dall-E, SoSoValue.com, chart from TradingView.com
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