Prediction: Solana Will Be the First Cryptocurrency to Get a Spot ETF in 2025

In the wake of the spot Bitcoin and Ethereum ETF approvals, there's been a lot of speculation about which crypto might be next. Already, a handful of names have been suggested, including all of the usual suspects: XRP, Solana (CRYPTO: SOL), Cardano, Litecoin, and Avalanche.

Of these, Solana has the best chance of getting a spot ETF. In fact, this could happen as early as January 2025. From my perspective, there are two key factors that make this likely to happen.

Market demand

In terms of market cap, Solana ranks fifth among all major cryptocurrencies. That's a huge determining factor, because market cap can be useful as a proxy for investor demand. As a general rule of thumb, Wall Street isn't going to launch a product if there isn't sufficient demand for it, so it's worth looking into how much demand is coming from both retail and institutional investors

At the end of June, crypto investment firm GSR ran the numbers and concluded that Solana trailed only Bitcoin and Ethereum in terms of overall demand. The firm's "demand analysis" took into account three key factors: (1) market cap and overall trading volume, (2) assets under management of investment products already in the marketplace, and (3) size, activity, and reach of the online community for a specific token. Across all of these metrics, Solana outpaced rivals XRP, Cardano, and Avalanche

There's also great data available from CoinShares, which tracks institutional investor inflows into and out of the major cryptocurrencies. According to its latest report from early August, Solana still has a clear lead over major rivals such as XRP, Cardano, and Litecoin in terms of year-to-date inflows. That being said, investor inflows into both Bitcoin and Ethereum dwarf anything that's happening with Solana right now

Regulatory outlook

Of course, there's no way that a Solana ETF is going to be approved if regulators have any doubts over whether Solana might actually be a security.

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