Solana ETF: Could a Canadian approval pave the way for US adoption?

• SOL is set to get its first ETF in North America courtesy of Canada-based 3iQ digital asset management. 
• However, the update hasn’t stirred SOL’s market amidst extended broader retracement. 

Solana [SOL] is set to have its first exchange-traded fund in Canada, per a recent update by 3iQ digital asset management firm.  Part of the digital asset manager’s announcement read, 

‘3iQ Corp. is pleased to announce that we have submitted a preliminary prospectus for The Solana Fund (QSOL) in Canada in relation to an initial public offering’

Additionally, The Solana Fund would stake its SOL to earn rewards that would be shared with investors.

Interestingly, Coinbase Institutional, which has custody over 80% of US spot Bitcoin ETFs, will handle 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 election. 

SOL’s status on charts

However, so far, the method argued for a final listing of spot ETF products in the US has been going through the futures first. BTC and Ethereum [ETH] had futures offerings before the SEC considered spot products. 

That said, the positive update didn’t stir SOL’s bullish price action on the chart as bearish BTC overwhelmed the markets.

As of press time, SOL traded at $132 and was below 50-day and 200-day EMAs (Exponential Moving Averages). It showed that SOL’s price action was below short and long-term trends and reinforced a bearish trend. 

Source: SOL/USDT, TradingView

However, the $120 level has been crucial support in 2024, and it could be retested if buying pressure remains muted, as indicated 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 flipped Memecoins for mindshare. A very rare sighting this cycle.’

This meant that the DeFi narrative was gaining momentum against memecoins, the backbone of the Solana ecosystem. 

Source: Kaito AI

Last week, the above statement was also established by CryptoQuant founder Ki Young Ju, who noted that memecoins dominance ‘has declined in altcoin markets.’

A drop in memecoin user activity could be headwinds for the ecosystem and SOL in general. However, the altcoin could see relief if BTC reverses recent losses.