Solana
Solana ETF Applications Fall Short of Expectations
9:56 ▪ 3 min read ▪ by Luc Jose A.
The recent ETF filings for Solana by VanEck and 21Shares sparked a brief burst of optimism in the cryptocurrency market. However, despite the promising announcement, the enthusiasm quickly faded. The excitement didn’t last, leaving many observers perplexed. What stifled this momentum?
Mixed Reaction to SOL Crypto ETF Filings
The recent announcement of the Solana files first spot ETF for crypto SOL by VanEck and 21Shares failed to generate the expected excitement in the market. Despite an initial 6% rise in the price of the SOL crypto, the overall impact remained limitedAccording to a recent analysis by blockchain analytics firm Kaiko, open interest in derivatives markets remains 20% below early June levels.
While the SOL cryptocurrency recorded a positive cumulative volume delta (CVD) of $29 million thanks to significant buying on Coinbase, it failed to sustain its momentum. SOL’s volume-weighted funding rate briefly spiked on June 27 before falling back to neutral levels, indicating a lack of sustained bullish demand. In short, the initial enthusiasm was not enough to sustainably drive the market.
The causes of market indifference
There are several factors behind this mixed reaction. For one, the Solana derivatives market is still too small to generate mass interest. For another, regulatory challenges are weighing heavily on investor optimism, especially since the SOL crypto has been mentioned in several SEC lawsuits.
At the same time, traditional investors seem increasingly attracted to blended ETFs, such as those recently filed by Hashdex and HashKey, which offer a diversified portfolio of Bitcoin (BTC) and Ethereum (ETH). Kaiko’s Value at Risk (VaR) tool indicates that an equally weighted BTC/ETH portfolio would have returned 58% in 2024, compared to 20.6% in 2021, thus offering a more attractive risk-return profile.
Expectations placed on Solana ETF filings have not been fully met. Regulatory challenges and the modest size of the derivatives market, combined with the growing appeal of BTC/ETH blended ETFs, explain this mixed reaction. Investors should continue to analyze the market to anticipate movements and adjust their strategies accordingly.
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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 are solely those of the author and should not be considered investment advice. Do your own research before making any investment decision.