The U.S. Securities and Exchange Commission approved 19b-4 forms for eight spot Ethereum exchange-traded funds from companies like BlackRock and Fidelity on Thursday. However, it may be a long road before other spot crypto ETFs are approved in the country.

While the spot Ethereum ETF issuers still need to have their S-1 registration statements go effective before trading can begin — a process that could take days or weeks — attention turned toward cryptocurrencies that could receive an ETF wrapper next, with Solana SOL +3.58% top of the speculative list.

Anthony Scaramucci, the former White House Communications Director and managing partner of alternative investment firm SkyBridge, was among the voices optimistic of a Solana ETF being next. “We are going to get a SOL ETF, get ready,” Scaramucci posted following the spot Ethereum ETF approvals yesterday.

CNBC presenter Brian Kelly was another speculating on the chances of an ETF for the fifth-largest cryptocurrency by market cap. “You got to think about Solana as probably the next one,” Kelly said on Wednesday. “Bitcoin, Ethereum and Solana are probably the big three for this cycle.”

Kelly mirrored comments from Joe McCann, a Solana investor and the founder, CEO and CIO of crypto fund Asymmetric. "If there's an ETF that comes next, it's probably something like Solana." However, picking up on one of the potential challenges for Solana, among some other cryptocurrencies, McCann added, “Granted there is some language in the Coinbase lawsuit that could impact that.”

The 'unregistered security' question weighing heavily on some cryptocurrencies

As McCann alluded to, Coinbase was sued by the SEC in June 2023, one day after the regulator filed a lawsuit against exchange rival Binance. The SEC also sued Kraken in November last year alleging similar securities law violations.

Importantly, within those lawsuits, the SEC named several cryptocurrencies it considers to be "unregistered securities," including Solana, as well as Cardano, Polygon, Near and Internet Computer, among others.

So therein lies one of the problems facing some cryptocurrencies, with bitcoin never facing that classification and ether, the asset at least, seemingly assigned a similar “commodity-based” status in yesterday’s approval order. However, ether staking is a different matter, with issuers rushing to remove staking features from their spot Ethereum ETF filings in recent days as the separation of ether, the asset, from its staking functionality appeared to become a crucial factor in the spot Ethereum ETF approvals.

This may be due to the SEC's concerns about staking cryptocurrencies, with access to staking another part of the Coinbase lawsuit — as the agency claimed the feature was violating securities laws.

The “SEC isn't dancing around SOL's status like they have ETH,” Bloomberg ETF analyst James Seyffart said. “Those lawsuits against Coinbase and Kraken and others flat out say ‘Solana is a security.’ Which could very easily make this a very rocky road.”

While the SEC has named a lot of top coins as securities, it has avoided doing so for tokens that are closely related to Bitcoin, providing some options there. But they face different questions over demand and liquidity.

McCann pointed to Dogecoin as another contender given its comparability to Bitcoin’s launch, describing it as “definitely not a security.” Others have also highlighted Litecoin for similar reasons.

“This was essentially my and Alex Krüger's take to Joe McCann's SOL take on the last episode of Bits and Bips,” Seyffart said. “Though I don’t see much demand for an LTC ETF even if feasible? Personally I'm not sure about DOGE either but who knows!”

While Dogecoin and Litecoin may make more sense from a regulatory perspective, “If I'm an issuer [I don't know] if I'm spending a couple hundred grand to launch a Litecoin ETF?,” Seyffart added. “I think a SOL ETF would see the most demand vs other digital assets (aside from BTC & ETH).”

CFTC-regulated futures markets and futures ETFs needed first

For both Bitcoin and Ethereum ETFs, they each had futures products available first. This allowed for a lengthy correlation analysis period between CME futures products and spot exchange rates to ensure they were sufficiently high before the likelihood of any spot ETFs could even be considered. The same would potentially be needed for any other crypto ETFs.

CME Bitcoin futures were launched in December 2017, with CME Ether futures following in February 2021. Bitcoin futures ETFs then debuted in the U.S. in October 2021, with Ethereum futures ETFs following in October 2023.

Based on current precedent, Seyffart suggested that a spot Solana ETF could happen within a few years of getting a CME-regulated futures market. However, “Congress and market structure bills like FIT21 could make it happen quicker,” he added.

The U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21) on Wednesday — a crypto market structure bill that aims to regulate the industry at large, marking the first time comprehensive crypto legislation has been voted on in the full House.

FIT 21 would grant more power and funding to the Commodity Futures Trading Commission to oversee crypto spot markets and "digital commodities," particularly bitcoin, but allow crypto projects to self-certify as being "decentralized," SEC Chair Gary Gensler argued. The bill also creates a process to allow for the secondary market trading of crypto assets if they were "initially offered as part of an investment contract."

However, there is no companion bill for FIT21 in the Senate, and top lawmakers in the Democrat-controlled Senate have not shown interest in the bill or have opposed it in the past. The Biden Administration also opposed FIT21 but said it is "eager to work with Congress" on a balanced framework for digital assets.

Though FIT21 is unlikely to be brought up in the Senate this year, the bill could set the stage for the next Congress in January.

With the potential for a FIT21-type bill to place crypto markets under CFTC oversight, some questioned if that would override the SEC’s current view. “Yes and no,” Seyffart responded. “The SEC still decides on the approval orders for all ETFs. And they aren't approving an ETF holding a digital asset that has no federally regulated trading venues or federally regulated futures trading venues.”

“No sol ETF until either CME-traded sol futures exist or Congress puts legit crypto regulatory framework in place,” The ETF Store President Nate Geraci added. “Crypto ETF spigot turned off for a while after spot eth ETF approval.”

That stance is reflected in the market too, with the Ethereum-based decentralized prediction platform Polymarket pricing odds of a Solana ETF in 2024 at just 11% with only $122,657 in wagers placed.

Therefore, even if Solana can get around the SEC’s “unregistered security” label, it might be a while before a spot Solana ETF, or any other spot crypto ETF in the U.S., is fully on the cards.