Solanahas consolidated its position as one of the top cryptocurrencies alongside Bitcoin and Ethereum. With Bitcoin and ETH already having or nearing the approval of US spot ETFs, the potential for the next spot ETF for SOL naturally becomes the focus.
A recent analysis by GSR Markets suggests that such an ETF could catalyze a price increase for SOL, potentially reaching nine times its current value.
To gauge the potential impact on the SOL price, GSR Markets compared it to Bitcoin’s experience after approving its own ETF. Historically, Bitcoin’s price surged from $27,000 to around $63,000, mainly driven by inflows of ETF-related funds, resulting in a 2.3x increase in price.
GSR Markets applied a similar scenario to Solana, predicting potential price increases ranging from 1.4x to 8.9x based on the scale of inflows relative to Bitcoin.
Market dynamics further increase the potential upside for SOL. Unlike BTC, Solana’s active use in staking and decentralized applications suggests that ETF-related inflows could have a greater impact. This could create what analysts call “free choice” for investors, reflecting the significant potential for upward movement relative to the current market conditions.
Despite ongoing challenges such as the relative market size compared to Bitcoin and regulatory uncertainties, GSR Markets remains optimistic about Solana’s prospects. If US regulations develop to accommodate more spot digital asset ETFs, SOL could experience one of the largest price increases in recent cryptocurrency history.
The road to a Solana spot ETF
According to GSR Markets’ research, the path to establishing a spot cryptocurrency ETF in the US depends on several regulatory and market conditions. Unlike the futures-based ETFs currently dominating the market alongside Bitcoin and Ethereum, a spot ETF for Solana would require a federally regulated futures market and demonstrated market relevance over several years.
However, recent political shifts imply potential changes in the regulatory landscape. Support for the cryptocurrency industry from figures like former President Donald Trump has softened opposition from Democrats, leading to bipartisan support for regulatory frameworks that could pave the way for new opportunities in the cryptocurrency space, including ETF approvals.
Key determining factors for approving a spot Solana ETF include measures of decentralization, equity requirements, and governance ratings. Market indicators that measure potential investor interest and market viability, existing asset management size, and community activity are also factors.
GSR Markets’ analysis combines these factors into an ETF probability score, positioning Solana favorably alongside Ethereum in the competition for the next spot digital asset ETF. Ethereum’s recently submitted ETF filings and expected launch put it in a leading position, with Solana following closely behind due to its high scores in decentralization and demand indicators.