Spot Solana exchange-traded funds (ETFs) in the United States have the potential to surge the price of SOL by a magnitude of nine, as indicated by crypto market maker GSR Markets.
In a report published on June 27, the company categorized Solana as a key player in the crypto space and delved into the possibility of Solana’s (SOL) emergence as the next spot cryptocurrency ETF to garner regulatory approval in the U.S. Interestingly, GSR’s report coincided with VanEck’s filing to launch a spot Solana ETF on the same day, catching many by surprise.
GSR, holding a bullish stance on SOL, arrived at the “8.9x” projection by assuming that spot Solana ETFs could capture 14% of the inflows witnessed by spot Bitcoin ETFs since their inception in January, taking into account their relative market capitalization.
In GSR’s optimistic scenario, termed the “blue sky scenario,” SOL’s current value of $149 could soar to surpass $1,320, leading to a market cap of $614 billion (based on the current supply). On the other hand, GSR’s more conservative “bear” and “baseline” scenarios envision spot Solana ETFs attracting 2% and 5% of Bitcoin’s flows, resulting in respective price increases of 1.4x and 3.4x for SOL.
The estimations by GSR could be further elevated if the spot Solana ETFs incorporate earnings from staking rewards, even though staking was not permitted in the approved spot Ether (ETH) ETFs. Despite GSR’s positivity, Bloomberg ETF analyst Eric Balchunas and others believe that a change in the U.S. presidential leadership and the Securities and Exchange Commission chair would be essential for serious consideration of a spot Solana ETF.
The SEC, under the leadership of Gary Gensler, previously categorized SOL as a security during legal actions against Binance and Coinbase, potentially intensifying the challenges on the pathway to approval compared to the now-established spot Bitcoin (BTC) and Ether ETFs. The entry of a new U.S. president and SEC chair could possibly impact the prospects of a spot Solana ETF gaining traction.
Moreover, VanEck’s filing came shortly after cryptocurrency asset manager 3iQ submitted an application for a spot Solana ETF in Canada, marking a significant milestone in North America. The Solana ecosystem and network have also garnered acclaim from Franklin Templeton, a $1.5 trillion asset manager, although the firm has not confirmed plans for a spot Solana ETF in the foreseeable future.
Currently, over $1 billion worth of Solana exchange-traded products are available globally, reflecting the growing interest and investment opportunities in the Solana blockchain. A colorful development in the crypto landscape has been the chief of El Salvador’s national Bitcoin advocating for Argentina to embrace digital assets.