SOL Price Could Surge Ninefold Following Approval of Spot Solana ETFs, Predicts GSR Markets
Ruholamin Haqshanas
Last updated:
June 28, 2024, 03:46 EDT
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2 min read
The approval of spot Solana exchange-traded funds (ETFs) in the United States is anticipated to significantly boost the price of SOL by up to nine times, according to insights from crypto market maker GSR Markets.
In a recent report issued on June 27, GSR Markets highlighted Solana as one of the “big three” in crypto and assessed its prospects as the next cryptocurrency to secure regulatory approval for a spot ETF in the US. This report coincided with the unexpected filing by VanEck to introduce a spot Solana ETF.
GSR, which has a bullish stance on SOL, projected a potential increase of “8.9x,” envisioning that spot Solana ETFs could attract 14% of the capital inflows observed by spot Bitcoin ETFs since their inception in January, relative to their respective market capitalizations.
In an optimistic scenario, as outlined by GSR, this surge could propel Solana’s current price of $149 to over $1,320, leading to a market capitalization of $614 billion based on the current supply. However, GSR also presented more cautious projections.
Under the “bear” and “baseline” scenarios, GSR forecasted price increases of 1.4x and 3.4x respectively for Solana, assuming spot Solana ETFs capture 2% and 5% of Bitcoin’s flows.
GSR emphasized the potential for even higher estimates if spot Solana ETFs incorporate income from staking rewards, although staking activities were not allowed in the approved spot Ether ETFs.
Despite GSR’s optimism, Bloomberg ETF analyst Eric Balchunas and others suggested that significant changes in US presidential leadership and the chairmanship of the Securities Exchange Commission would be necessary for serious consideration of a spot Solana ETF.
Under Chair Gary Gensler’s leadership, the SEC has categorized the SOL token as a security in lawsuits against Binance and Coinbase, potentially complicating the path to approval compared to already approved spot Bitcoin and Ether ETFs.
VanEck’s recent filing for a spot Solana ETF follows cryptocurrency asset manager 3iQ’s similar application in Canada, marking a North American first.
Franklin Templeton, a $1.5 trillion asset manager, has praised the Solana ecosystem and network, although it has not confirmed plans to launch a spot Solana ETF.
Currently, worldwide, over $1 billion worth of Solana exchange-traded products are available, indicating a growing demand for exposure to the SOL token and the Solana network.
Ethereum ETF Approval Seen as Politically Influenced
Bloomberg ETF analyst James Seyffart suggested that the approval of spot Ethereum ETFs likely involved political considerations alongside financial ones.
In a recent interview, Seyffart indicated that decisions by the Biden administration and responses from the crypto community played crucial roles in the approval process.
Regarding the approval of other crypto ETFs, including Solana, Seyffart noted that without significant regulatory changes, their approval remains unlikely. He emphasized the necessity of a regulated market to monitor these assets for fraud and manipulation.
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