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This is how much the SOL price could rise if Solana ETFs are approved

This is how much the SOL price could rise if Solana ETFs are approved
This is how much the SOL price could rise if Solana ETFs are approved

A new report predicts a significant price increase for Solana if Solana USD/CHF Exchange Traded Fund (ETF) is approved.

The report from market maker GSR suggests that under a Trump administration, regulatory changes could pave the way for a Solana ETF, which would lead to significant inflows and a corresponding increase in the SOL price.

The argument for a Solana ETF

With Bitcoin BTC/USD And ether ETH/USD GSR argues that Solana is likely to follow suit as it either has spot ETFs or is close to securing them.

Jamie Coutts by GSR highlights the changing regulatory environment, especially given Donald Trump’s newfound support for the crypto industry.

This shift has already led to bipartisan legislative action, such as the repeal of the SEC’s crypto accounting rule SAB 121 and the “crypto law” FIT21.

Coutts notes, “Such a scenario is not only possible, but potentially even likely,” suggesting that a Trump administration and a supportive SEC could facilitate approval of a Solana ETF.

Price Impact Comparison: Solana vs. Bitcoin

The GSR report highlights the potential impact of a Solana ETF on the SOL price by comparing it to the performance of Bitcoin. Following the approval of spot Bitcoin ETFs, the Bitcoin price rose from $27,000 to about $63,000, an increase of 2.3x.

GSR uses this as a basis to estimate the potential price increase of Solana.

Given Solana’s smaller market capitalization compared to Bitcoin, the report adjusts the potential inflows accordingly and outlines three scenarios:

  • Bear scenario: The assets under management of the global investment product Solana are 2% of Bitcoin’s assets, resulting in a 1.4x price increase.
  • Base scenario: Solana’s investment products received 5% of cumulative inflows compared to Bitcoin, indicating a 3.4x price increase.
  • Blue Sky Scenario: Over the past two years, Solana’s relative inflows have been 31% and 9% of Bitcoin’s, respectively, representing an 8.9x price increase in this scenario.

Also read: Is the Altseason just around the corner? Real Vision analyst reveals key indicators

Key figures and analyses

The report evaluates Solana’s decentralization and demand, crucial factors for ETF approval. Solana performs well on decentralization metrics, including the Nakamoto coefficient, staking requirements, and governance ratings.

In terms of demand, Solana is well positioned due to its strong market indicators, active community, and significant market capitalization.

“While a spot Solana ETF could see inflows equal to a percentage of Bitcoin’s 2.3x increase due to spot ETFs, we now need to adjust for the impact a spot ETF can have on SOL due to its smaller size,” the report said.

With Solana’s market cap averaging just 4% of Bitcoin’s over the past year, GSR predicts Solana could gain 1.4x in a bear scenario, 3.4x in a base case, and 8.9x in a blue sky scenario.

For further insight into the future of digital assets and the potential impact of regulatory changes, industry participants can attend Benzinga’s Future of Digital Assets event on November 19, which will cover these topics in depth.

Read more: VanEck files Solana ETF application, SOL rises 6%

Image: Shutterstock

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