Solana
Crypto: a spot ETF could multiply the price of Solana by 9!
Sat June 29, 2024 ▪ 3 min reading ▪ by Luc Jose A.
A recent report from GSR Markets suggests that the approval of a spot ETF for Solana could propel the price of SOL to unprecedented levels. This prospect comes as VanEck files for a Solana ETF, reinforcing the idea that this crypto could transform the financial landscape.
GSR Market Projections
According to the report released by GSR Markets on June 27, the approval of a spot ETF for Solana could lead to a dramatic increase in price of SOLIn an optimistic scenario, GSR predicted that Solana’s price could rise 9x, potentially reaching over $1,320. This estimate is based on the assumption that Solana spot ETFs would capture 14% of the flows seen by Bitcoin spot ETFs since their launch.
In addition to this “blue sky” scenario, GSR also considered a more conservative outlook. In a “bearish” scenario, where Solana ETFs captured only 2% of Bitcoin ETF flows, the SOL price could still increase by 1.4x. An intermediate scenario predicts a 3.4x increase if Solana ETFs captured 5% of Bitcoin ETF flows.
These forecasts highlight Solana’s enormous potential in the ETF spot market, especially if these include staking reward revenue. However, even without this additional revenue, the potential impact on Solana’s price remains significant.
Regulatory obstacles and perspectives
Despite GSR Markets’ optimism, approval of a spot ETF for Solana faces several significant regulatory hurdles. The U.S. Securities and Exchange Commission (SEC) recently classified Solana as a security in its lawsuits against Binance and Coinbase, complicating the path to ETF approval. This classification could require a change in leadership at the SEC, or even a new presidential administration, to see such a product approved.
Regulatory challenges are not dampening enthusiasm around Solana. VanEck’s recent filing for a Solana ETF, as well as growing interest from asset managers such as Franklin Templeton, speaks to the perceived potential of this crypto. If a spot ETF for Solana is approved, it could attract a significant share of the financial flows that have supported Bitcoin and Ethereum ETFs, leading to a marked increase in its price.
The approval of a Solana spot ETF could radically transform the crypto market. Not only could it significantly increase the price of SOL, but it could also boost institutional adoption and recognition of Solana as a major player in the ecosystem.
In summary, even if Solana’s future is promising, much depends on upcoming regulatory changes and political decisions.
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Luc José A.
A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I made a commitment to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. I strive every day to provide an objective analysis of current events, decipher market trends, relay the latest technological innovations and put into perspective the economic and societal challenges of this ongoing revolution.
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making an investment decision.