Crypto Analyzer

The Potential Surge of Solana (SOL) Price with Approved Solana ETFs

A recent report has indicated a significant potential increase in the price of Solana (SOL) if a Solana exchange-traded fund (ETF) is approved. The report, conducted by market maker GSR, suggests that regulatory changes under a Trump administration could pave the way for a Solana ETF, resulting in substantial inflows and a corresponding rise in SOL’s price.

The Case For A Solana ETF

GSR’s report points out that with Bitcoin and Ethereum either having or on the verge of securing spot ETFs, Solana is likely to follow suit. Jamie Coutts from GSR highlights the evolving regulatory landscape, especially with a potential shift under a supportive SEC influenced by Donald Trump.

This changing environment has already witnessed bipartisan legislative actions overturning crypto accounting policies and introducing crypto-friendly bills, indicating a favorable climate for a Solana ETF approval.

Price Impact Comparison: Solana vs. Bitcoin

The GSR report compares the potential impact of a Solana ETF on SOL’s price to Bitcoin’s experience. Following the approval of spot Bitcoin ETFs, Bitcoin’s price surged significantly. GSR uses this as a baseline to estimate Solana’s potential price rise under various scenarios.

  • Bear Scenario: 1.4x price increase based on Solana’s global investment product AUM reaching 2% of Bitcoin’s.
  • Base Case Scenario: 3.4x price increase with Solana’s investment products receiving 5% of Bitcoin’s cumulative inflows.
  • Blue Sky Scenario: 8.9x price increase with relative inflows to Bitcoin being 31% and 9% in the last two years.

Key Metrics And Analysis

The report evaluates Solana’s decentralization and demand, essential factors for ETF approval. Solana scores high in decentralization metrics and showcases strong demand indicators, active community, and a significant market cap.

Considering Solana’s market cap is just a fraction of Bitcoin’s, GSR projects potential price increases for SOL in different scenarios – 1.4x in a bear scenario, 3.4x in a base case, and 8.9x in a blue sky scenario.

Industry stakeholders seeking further insights into the future of digital assets and the impact of regulatory changes can explore Benzinga’s Future of Digital Assets event on Nov. 19 for in-depth discussions on these topics.

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