Crypto market creator GSR Markets claims that the legalization of spot Solana exchange-traded funds (ETFs) in the United States could send the price of Solana up 9x. In a recent June 27 article, GSR Markets noted Token as one of “crypto’s big three” and looked at the possibility of SOL emerging as the next spot cryptocurrency ETF to get US regulatory approval.
The paper coincided with VanEck’s announcement to open a SOL ETF slot, which surprised many. Based on the presumption that spot Token ETFs would capture 14% of the flows observed by spot Bitcoin ETFs since their inception in January, GSR, who has a long position on Token, came with an estimate of “8.9x” considering their relative market capitalization.
Based on the present supply, the positive scenario presented by GSR would drive Solana’s current price of $149 to above $1,320, generating a market value of $614 billion.
GSR did, nevertheless, also offer more conservative models. The spot Token ETFs would capture 2% and 5% of Bitcoin’s flows in the “bear” and “baseline” scenarios, respectively, resulting in respective price increases of 1.4x and 3.4x for Solana. Although staking was not allowed in the approved spot Ether ETFs, GSR underlined that these estimations could be significantly higher if the spot Token ETFs included income from staking rewards.
Solana Token Faces Regulatory Challenges
Although GSR is still positive, Bloomberg ETF analyst Eric Balchunas and others think that major consideration of a spot Token ETF would depend on a change in the US presidency and the chairperson of the Securities Exchange Commission (SEC).
Under Chair Gary Gensler, the SEC has labeled the SOL token as a security in lawsuits against Binance and Coinbase, complicating the path to approval relative to the already approved Bitcoin and Ether ETFs.
Following bitcoin asset management 3iQ’s application in Canada, which marks a first in North America, VanEck’s recent application for a spot Token ETF follows. Franklin Templeton, a $1.5 trillion asset manager, had compliments for the SOL environment and network.
In the meantime, the company has not stated whether it plans to eventually introduce a spot Token ETF. With almost $1 billion worth of Token exchange-traded instruments now on the market globally, demand for the SOL token and Token network exposure is clearly growing.
Expert Bloomberg ETF analyst James Seyffart believes political decisions rather than merely financial ones most likely shaped the approval of spot Ethereum ETFs. In a recent interview, Seyffart claimed that the political climate, particularly Biden administration projects and responses from the crypto community, greatly affected the approval process.
Apart from Bitcoin and Ethereum, the acceptability of other cryptocurrencies’ ETFs, including Solana, is doubtful without significant legislative revisions. Seyffart noted that tracking these assets for fraud and manipulation requires a regulated market.
