Spot Solana exchange-traded funds (ETFs) in the United States could potentially drive up the price of SOL by a factor of nine, according to crypto market maker GSR Markets.
In a June 27 report, GSR described Solana as part of “crypto’s big three” and investigated whether Solana would be the next spot cryptocurrency ETF to receive U.S. regulatory approval.
Coincidentally, the report came out the same day VanEck filed to issue a spot Solana ETF, surprising many.
GSR, which holds a long position on SOL, estimated an “8.9x” price increase assuming the spot Solana ETFs would attract 14% of the flows that spot Bitcoin ETFs have seen since their January launch, based on their relative market cap size.
In GSR’s “blue sky scenario,” Solana’s current price of $149 could soar to over $1,320, boosting Solana’s market cap to $614 billion.
In contrast, GSR’s “bear” and “baseline” scenarios would see spot Solana ETFs capturing 2% and 5% of Bitcoin ETF flows, leading to 1.4x and 3.4x price increases for SOL, respectively.
The firm noted that these estimates might be even higher if spot Solana ETFs included income from staking rewards, although staking wasn’t allowed in the approved spot Ether ETFs.
GSR stated, “Solana is poised for a spot ETF if and when additional spot digital asset ETFs are allowed in the US, and the impact on price may just be the largest yet.”
Despite GSR’s optimism, Bloomberg ETF analyst Eric Balchunas and others believe that a change in the U.S. presidency and the chair of the Securities and Exchange Commission (SEC) would be necessary for a spot Solana ETF to be seriously considered.
The SEC and its Chair, Gary Gensler, labeled SOL as a security in lawsuits against Binance and Coinbase, arguably making the pathway to approval more challenging than for the now-approved spot Bitcoin and Ether ETFs.
VanEck’s application follows cryptocurrency asset manager 3iQ’s filing for a spot Solana ETF in Canada, marking a North American first.
The Solana ecosystem and network have also received praise from $1.5 trillion asset manager Franklin Templeton, although the firm hasn’t confirmed plans for a spot Solana ETF in the future.
Globally, over $1 billion worth of Solana exchange-traded products are already available.
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