Crypto bank Sygnum says there won't be any more crypto ETFs: other tokens have too low visibility and demand

The investment manager of Sygnum, a crypto bank, Katalin Tischhauser, revealed in a recent interview that due to the low demand and recognition of tokens like Solana and Cardano, the chances of approval for other cryptocurrency ETFs in the United States are quite slim. However, issuer VanEck holds a different view.

Sygnum, the crypto bank, released its operational report for the first half of the year: derivative trading grew by 500% and plans to expand in Asia.

Sygnum Bank: No Further Crypto ETFs

Lack of Regulated Trading Platforms

Tischhauser first pointed out one of the main obstacles to the launch of other crypto ETFs, which is the lack of regulated trading platforms approved and accepted by the U.S. Securities and Exchange Commission (SEC).

He stated that the committee needs to ensure market stability, prevent market abuse, manipulation, and fraud, which needs to occur within markets regulated by them, however, most current cryptocurrency exchanges are accused of being "unregistered exchanges":

In this regard, the Chicago Mercantile Exchange (CME) may be one of the solutions.

He added, "Regulatory issues involve multiple aspects, however, once resolved, SEC's acceptance of regulated markets such as Coinbase may lead to the birth of more crypto ETFs."

Low Demand for Altcoin ETFs and Low Awareness

Tischhauser also indicated that even if a crypto ETF successfully navigates the obstacles, demand for altcoin ETFs among the public will not be high:

We do not believe there will be a significant demand for ETFs other than Bitcoin and Ethereum. The awareness of Ethereum is about half of Bitcoin's, not to mention other tokens such as Solana, which have almost no recognition outside the crypto market.

He emphasized that even though Grayscale's GSOL Grayscale Solana Trust has managed assets of $73.2 million, it pales in comparison to the $6 billion scale of the Ethereum ETF ETHE:

Although the high premium of GSOL reflects some demand, its scale is much smaller than Bitcoin and Ethereum ETFs, indicating limited interest from investors.

This aligns with the views of BlackRock, the world's largest asset management company, as Robert Mitchnick, the company's digital asset manager, stated at Bitcoin 2024:

Bitcoin accounts for about 55% of market value. Ethereum is at 18%, the next reasonable investable asset is about 3%, but the current cryptocurrencies on the market are far from reaching that maturity or liquidity threshold.

No Chance for Solana ETF? BlackRock: Ethereum ETF Unlikely to Open Doors for Other Cryptocurrencies

VanEck: Leading Innovation Through Solana ETF

However, Matthew Sigel, the digital asset research director at ETF issuer VanEck, holds a different opinion, stating that the European market already has various crypto ETPs, and the U.S. market should not be limited to just Bitcoin and Ethereum ETFs:

We hope to lead innovation in the U.S., as we submitted an application for a Solana ETF to the SEC at the end of June.

VanEck Digital Asset Manager: Why Did We Apply for a Solana ETF?

Currently, VanEck's Ethereum spot ETF ETHV has a scale of about $51 million, which is a significant gap compared to companies like BlackRock and Fidelity with $710 million and $290 million, respectively.