A research report released on Thursday by cryptocurrency market maker GSR praised Solana’s “superior technology” and the possibility of another Donald Trump presidency for why a U.S.-listed spot Solana ETF could be next in line for approval following the greenlighting of spot Bitcoin (BTC) ETFs in mid-January and the imminent launch of spot ether ETFs next week.
GSR projects an epic increase in SOL’s price buoyed by Solana ETFs, possibly by up to nine times, noting that the altcoin would see far more upside than Bitcoin did when its spot ETFs debuted.
Surprisingly, GSR’s report was released the same day Bitcoin ETF issuer VanEck filed to list a spot SOL ETF.
Solana ETFs A Real Possibility Under Trump
In the June 27 note, GSR noted that the recent technological advancements within the Solana ecosystem set it up to join Bitcoin and Ethereum in the exchange-traded fund (ETF) market.
“Solana is poised for a spot ETF if and when additional spot digital asset ETFs are allowed in the U.S., and the impact on price may just be the largest yet,” the report said.
GSR, which holds a long position in SOL, spotlights a remarkable shift in the political climate surrounding cryptocurrencies in recent months. Crypto is taking center stage upcoming election between incumbent Democratic president Joe Biden and his presumptive Republican challenger, ex-POTUS Donald Trump.
Specifically, the report notes “Change is already afoot with Donald Trump’s newfound backing of the crypto industry, which in turn caused Democrats to loosen their stance against digital assets in a tight election year.”
According to GSR’s analysis, Solana is one of only a slew of cryptocurrencies with strong market demand whose network also has a high degree of decentralization. The market-making firm said those two key factors are expected to encourage prospective ETF providers to pursue a listing.
“Solana is next, should additional spot digital asset ETFs be permitted in the U.S.,” the report concludes.
SOL Overshadows BTC?
Asset management firm VanEck submitted an S-1 registration statement on Thursday with the U.S. Securities and Exchange Commission (SEC) for a spot Solana ETF. This marks a huge step as it is Solana’s first spot ETF application in the U.S., coming less than a week after a similar product went live in Canada.
Shortly after the news of VanEck’s spot Solana ETF filing dropped, the Solana price jumped to $150 intraday highs. GSR compares Solana’s prospects to Bitcoin’s recent experience with spot ETF approval in the United States.
Notably, Bitcoin’s price appreciated 2.3x from $27,000 in October 2023, roughly three months before SEC approval, to nearly $63,000 this month, thanks to ETF-related developments.
However, the report suggests that Solana’s potential upside could be even more substantial, given its greater utility across a host of apps and use cases built atop the network.
“Unlike BTC, SOL is actively used for staking, and within decentralized applications, and as [such] the relationship between relative flows and relative size may not be linear,” GSR noted.
SOL Price Predictions
Comparing SOL’s price movement with Bitcoin’s following its own spot ETF approval, GSR reached an “8.9x” estimate based on the assumption that the spot SOL ETFs would attract 14% of the flows that the BTC ETFs have seen so far. The firm’s “blue sky scenario” would push Solana’s current price of $144 to over $1,300, while Solana’s market cap would grow to $613 billion from its current level.
Meanwhile, GSR’s “baseline” and “bear” cases would see the spot Solana ETFs draw in 2% and 5% of what Bitcoin attracted, sparking 3.4-fold and 1.4-fold price surges for SOL, respectively.
As of press time, SOL was worth $145.97, a 4.5% increase over the previous 24 hours.
