- SOL will get its first ETF in North America thanks to Canada-based 3iQ digital asset management.
- However, the update failed to move SOL’s market amid a wider retracement.
Solana [SOL] is expected to have its first exchange-traded fund in Canada, according to a recent update from digital asset management company 3iQ. Part of the announcement of the digital asset manager read,
‘3iQ Corp. is pleased to announce that we have filed a preliminary prospectus for The Solana Fund (QSOL) in Canada in connection with an initial public offering’
Additionally, the Solana Fund would leverage its SOL to earn rewards that would be shared with investors.
Interestingly, Coinbase Institutional, which holds more than 80% of US spot Bitcoin ETFs, will manage the assets for 3iQ alongside Tetra.
If approved, could this attract other asset managers and jurisdictions, especially the US? Bloomberg ETF analyst Eric Balchunas suggested it was possible, especially if Trump wins the US elections.
SOL’s status on maps
However, until now, the methodology that has advocated a definitive listing of spot ETF products in the US has gone through futures first. BTC and Ethereum [ETH] had futures offerings before the SEC considered spot products.
That said, the positive update did not move SOL’s bullish price action on the chart as bearish BTC overwhelmed the markets.
At the time of writing, SOL was trading at $132 and below the 50 and 200 day EMAs (Exponential Moving Averages). This showed that SOL’s price action was below the short- and long-term trends, reinforcing a bearish trend.
Source: SOL/USDT, TradingView
However, the $120 level has been a crucial support going into 2024, and this could be tested again if buying pressure remains subdued, as evidenced by the below-average RSI (Relative Strength Index).
Another complication for SOL’s recovery was the reported shift in altcoin dominance from memecoins to DeFi. According to the Web 3 market intelligence platform Kaito AI,
“DeFi has turned Memecoins into mindshare. A very rare sighting this cycle.’
This meant that the DeFi story was gaining momentum against memecoins, the backbone of the Solana ecosystem.
Source: Kaito AI
Last week, the above statement was also made by CryptoQuant founder Ki Young Ju, who noted that the dominance of memecoins “has diminished in the altcoin markets.”
A decline in memecoin user activity could be a headwind for the ecosystem and SOL in general. However, the altcoin could see relief if BTC makes up for its recent losses.