GSR Markets Predicts 9x Surge in SOL Price Following Approval of Spot Solana ETFs

Forecasting a Potential 9x Surge in SOL Price Post Spot Solana ETFs Approval, as Predicted by GSR Markets


By Ruholamin Haqshanas
Last updated:
June 28, 2024, 03:46 EDT
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2 min read


The imminent approval of spot Solana exchange-traded funds (ETFs) within the United States has the capability to propel SOL’s price by a factor of 9, as outlined by GSR Markets, a prominent player in the cryptocurrency market.
In a recent analysis unveiled on June 27, GSR Markets identified Solana as one of the “crypto’s significant trio” and evaluated the chances of Solana emerging as the next approved spot cryptocurrency ETF in the US.
The release of the report coincided with the unexpected filing by VanEck to introduce a spot Solana ETF, surprising many in the industry.
Spot Solana ETFs are Envisaged to Attract 14% of Bitcoin ETF Inflows
With a bullish stance on SOL, GSR approximated an increase of “8.9x,” basing it on the premise that spot Solana ETFs would absorb 14% of the capital influx witnessed by spot Bitcoin ETFs since their inception in January, factoring in their relative market capitalization.
In an optimistic scenario put forth by GSR, this surge could drive Solana’s current price of $149 to soar above $1,320, translating to a market cap of $614 billion considering the existing supply.
Nonetheless, GSR also delineated more prudent scenarios.
Under the “bear” and “baseline” projections, the spot Solana ETFs would attract 2% and 5% of Bitcoin’s inflows, potentially leading to respective price hikes of 1.4x and 3.4x for Solana.
GSR emphasized the likelihood of these estimates escalating further if the spot Solana ETFs integrate earnings from staking rewards, even though staking remains disallowed in the approved spot Ether ETFs.
Despite GSR’s buoyancy, Bloomberg ETF analyst Eric Balchunas and others argue that a shift in the US presidential office and the chairmanship of the Securities Exchange Commission would be crucial for a substantial contemplation of a spot Solana ETF.
Under the leadership of Chair Gary Gensler, the SEC has classified the SOL token as a security in legal battles against Binance and Coinbase, a stance that could pose additional hurdles for approval in comparison to the already sanctioned spot Bitcoin and Ether ETFs.
The recent submission by VanEck for a spot Solana ETF closely follows the filing by cryptocurrency asset manager 3iQ for a similar offering in Canada, marking an initial step in North America.
The Solana ecosystem and network have garnered acclaim from Franklin Templeton, a $1.5 trillion asset management company.
Nevertheless, the firm has yet to confirm its intentions regarding a potential launch of a spot Solana ETF in the future.
Currently, over $1 billion worth of Solana exchange-traded products are accessible globally, underscoring the growing appetite for exposure to the SOL token and the broader Solana network.
Political Factors at Play in Ethereum ETF Approval
James Seyffart, an ETF analyst at Bloomberg, suggested that the approval of spot Ethereum ETFs may have been influenced by political factors rather than purely financial considerations.
In a recent statement, Seyffart indicated that the political landscape, including actions by the Biden administration and responses from the crypto community, likely played a pivotal role in facilitating the approval process.
He contended that beyond Bitcoin and Ethereum, securing approval for other crypto ETFs, such as Solana, would necessitate substantial regulatory modifications.
Seyffart emphasized the necessity of a regulated market to oversee these assets for potential instances of fraud and market manipulation.