Spot Solana ETFs Could Skyrocket SOL's Price Ninefold, Says GSR Markets

Spot Solana ETFs could potentially surge SOL‘s price by a factor of nine, according to GSR Markets. Despite optimism, regulatory hurdles remain for U.S. approval.

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Potential Impact of Spot Solana ETFs

GSR Markets included Solana as one of “crypto’s big three” in a June 27 study and investigated the likelihood of Solana becoming the second spot cryptocurrency ETF to get U.S. regulatory clearance. Surprising many in the market, VanEck filed to offer a spot Solana ETF on the same day.

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Based on their “8.9x” estimate, GSR, which has a long position on SOL, believes that, in relation to their market capitalization, spot Solana ETFs would collect 14% of the flows that spot Bitcoin ETFs have witnessed their debut in January. Under GSR’s “blue sky scenario,” Solana’s present price of $149 might jump to over $1,320, hence raising its market valuation to $614 billion at the current supply.

Based on GSR’s “bear” and “baseline” models, spot Solana ETFs might get 2% and 5% of Bitcoin’s flows respectively, which would produce 1.4x and 3.4x price rises for Solana respectively. Although staking was not permitted in the authorized spot Ether ETFs, the company stated that these estimations might be significantly higher if the ETFs incorporate revenue from staking incentives.

Challenges and Regulatory Hurdles

Though GSR has a positive view, Bloomberg ETF expert Eric Balchunas and others feel that a change in the U.S. President and the Chair of the Securities Exchange Commission (SEC) would be required for a spot Solana ETF to be really taken under consideration. Complicating the approval process compared to currently authorized spot Bitcoin and Ether ETFs, the SEC and Gary Gensler, its Chair, branded the SOL token as a security in litigation against Binance and Coinbase.

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Following cryptocurrency asset management 3iQ’s application for a spot Solana ETF in Canada, VanEck marks a North American first. Franklin Templeton, the $1.5 trillion asset manager, has also praised the Solana ecosystem; the company has not stated intentions to apply for a Solana ETF.

Current Solana ETF Situation

With around $1 billion worth of Solana exchange-traded products available globally right now, the Solana ecosystem shows great demand and room for expansion.

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