SOLANA ETF: BULL OF AN OPPORTUNITY

Could a Physically-Backed Solana ETF Be the Catalyst for Solana's Price Surge?

The Solana ecosystem is currently experiencing explosive growth. This surge has caught the attention of investors and analysts alike. With the recent approval of physically-backed Bitcoin and Ethereum ETFs, the possibility of a Solana ETF has become a hot topic. As the bull market gains momentum, the approval of a physically-backed Solana ETF could potentially send Solana’s price soaring.

This brief article delves into the details of Solana ETFs, the current state of ETF applications, and the challenges that need to be overcome for these products to hit the stock market, with potential for ETF inflows and a bold price prediction that could see Solana’s value skyrocket.

The Current State of Solana ETF Applications

Solana, the fifth-largest cryptocurrency by market cap [$109,317,116,798 NZD] , or fourth if you exclude Tether's USDT stable coin, is on the radar for a physically-backed ETF product.

With Bitcoin and Ethereum already having their ETFs approved, Solana seems to be a logical next step given its popularity and ranking. VanEck attributes Solana’s decentralisation and Ethereum-like structure as key reasons it is a prime candidate for the next ETF.

In the United States, two ETF issuers have filed applications for a physically-backed Solana ETF. VanEck submitted their application on June 27th, followed by 21Shares just 24 hours later. Additionally, Canada has also recently submitted an application. While major players like BlackRock and Fidelity have yet to join the race, the presence of these applications signals growing institutional interest in Solana.

Thus, the SEC has 240 days to decide on ETF applications from the date they acknowledge the filing. Bloomberg analyst Eric Balchunas estimates that a final decision on the Solana ETFs could come around mid-March 2025. However, several factors could influence this timeline, including the outcome of the upcoming U.S. presidential election and the current regulatory environment.

The chaotic Biden administration has been doggedly resistant to cryptocurrency innovation, whereas former President Trump has positioned himself as pro-crypto. The outcome of the November election could significantly impact the approval process for Solana ETFs. If Biden staves off his deniers, seeks out the election and wins, the current anti-crypto stance of the SEC might continue, potentially delaying ETF approvals. Conversely, if Trump wins, a new SEC chair more favourable to cryptocurrency could accelerate the process and more freedom-esque moves.

However, the approval of Solana ETFs faces several obstacles. Currently, there are no Solana futures contracts listed on the CME, which the SEC could use as a reason to delay approval. Additionally, Solana is currently classified as an unregistered security by the SEC, creating further regulatory complications. The market will also be closely watching the performance of Ethereum ETFs once they start trading. If these ETFs attract significant inflows, it could bolster the case for Solana ETFs. However, if Ethereum ETFs fail to generate strong demand, it could indicate limited interest in altcoin ETFs beyond Bitcoin.

Potential Impact of Solana ETF Approval

If a Solana ETF is approved, it could have a significant impact on the cryptocurrency market. GSR Markets predicts that ETF inflows could potentially drive Solana’s price up by nine times its current value, reaching around $1,200. This projection aligns with our previous Solana price prediction video. GSR’s bullish case is based on Solana ETFs capturing a similar market share as Ethereum ETFs, estimating a post-ETF market cap of $614 billion for Solana.

In their base case, GSR forecasts a 3.4x increase in Solana’s price, with a bear case projecting a 1.4x increase. VanEck is also optimistic, predicting a Solana price of $3,211 by 2030 based on the cryptocurrency’s growth potential, even before considering the impact of ETFs.

Summary

The potential approval of a physically-backed Solana ETF could be another real game-changer for the cryptocurrency market. While, in the US, there are significant regulatory and market challenges to overcome, the interest from ETF issuers and the growing institutional interest in Solana suggest that an ETF approval is a possibility. If approved, a Solana ETF could drive substantial inflows and significantly boost Solana’s price, making it another Rare and lucrative crypto opportunity for investors.