Cryptocurrency market maker GSR Markets has projected a potential skyrocketing of the price of SOL, the native token of the Solana blockchain, by a factor of nine if a spot Solana exchange-traded fund (ETF) is launched in the United States. According to GSR’s analysis, under the most optimistic “blue sky scenario,” the establishment of a spot Solana ETF could catapult SOL’s price to over $1,320, with the market capitalization soaring to an estimated $614 billion.
The firm’s report also delineates less optimistic, yet still bullish outcomes. In a “bear scenario,” the advent of spot Solana ETFs could lead to a comparatively modest 1.4 times increase in SOL’s price, while a “baseline scenario” predicts a 3.4 times surge.
However, achieving the reality of a spot Solana ETF in the U.S. faces notable regulatory challenges. Eric Balchunas, a Bloomberg ETF analyst, alongside others in the space, has indicated that a change in the presidency and a new chair at the Securities and Exchange Commission (SEC) would likely be prerequisites for a spot Solana ETF to gain serious consideration.
Adding to the regulatory hurdles, the SEC, spearheaded by Chair Gary Gensler, has previously identified SOL as a security in legal actions against prominent cryptocurrency exchanges Binance and Coinbase. This classification could further complicate the approval process for a spot Solana ETF in the U.S.
Despite these obstacles, there has been movement towards Solana-based ETFs in North America. VanEck filed for a U.S. spot Solana ETF not long after 3iQ’s filing for a similar product in Canada, marking a first for such ETFs on the continent. Additionally, the Solana foundation has garnered acknowledgment from Franklin Templeton, an asset manager overseeing $1.5 trillion, for the ecosystem’s strengths though the firm has not confirmed any intent to establish a pertaining ETF.
Moreover, around the globe, investors currently have opportunities to engage in over $1 billion worth of Solana exchange-traded products. This figure underscores the existing global demand for financial products linked to SOL.
Reflecting on the significance of ETFs within the crypto space, Galaxy Research highlighted that the launch of an Ethereum ETF could be met with $5 billion in inflow within the inaugural five months, pointing to a dwindling exchange supply of Ethereum as staking increases.
Recent market dynamics have seen both Solana and another blockchain platform, Avalanche, enjoying rallies of 9% and 7% respectively amid general crypto market recovery. Notably, a discernible increase in FOMO (fear of missing out) is believed to be a driving factor behind the upsurge in Solana’s price, laying a foundation of optimism for potential Solana ETFs and their impact on SOL’s valuation.
