Markets
Cryptocurrencies: A Spot ETF Could Multiply Solana’s Price by 9!
Sat 29 Jun 2024 ▪ 3 min read ▪ by Luc Jose A.
A recent report from GSR Markets suggests that the approval of a Solana spot ETF could push the price of SOL to unprecedented levels. This prospect comes as VanEck files for a Solana ETF, reinforcing the idea that this cryptocurrency could transform the financial landscape.
GSR Market Projections
According to a report published by GSR Markets on June 27, the approval of a spot ETF for Solana could lead to a dramatic increase in the price of the SOLIn an optimistic scenario, GSR predicts that Solana’s price could multiply by 9, potentially reaching over $1,320. This estimate is based on the assumption that Solana spot ETFs would capture 14% of the flows seen by Bitcoin spot ETFs since their launch.
In addition to this “blue sky” scenario, GSR also considered a more conservative outlook. In a “bear” scenario, where Solana ETFs capture only 2% of Bitcoin ETF flows, SOL’s price could still increase 1.4 times. A mid-case scenario calls for a 3.4 times increase if Solana ETFs capture 5% of Bitcoin ETF flows.
These forecasts highlight Solana’s huge potential in the spot ETF market, especially if they include revenue from staking rewards. However, even without this additional revenue, the potential impact on Solana’s price remains significant.
Regulatory obstacles and prospects
Despite GSR Markets’ optimism, the approval of a spot ETF for Solana faces several significant regulatory hurdles. The U.S. Securities and Exchange Commission (SEC) recently classified Solana as a security in its lawsuits against Binance and Coinbase, complicating the path to ETF approval. This classification may require a change in SEC leadership or even a new presidential administration to see such a product approved.
Regulatory challenges aren’t dampening Solana’s enthusiasm. VanEck’s recent application for a Solana ETF, as well as growing interest from asset managers like Franklin Templeton, attest to the cryptocurrency’s perceived potential. If a Solana spot ETF is approved, it could attract a significant portion of the cash flows that have supported Bitcoin and Ethereum ETFs, leading to a sharp increase in its price.
The approval of a Solana spot ETF could radically transform the cryptocurrency market. Not only could it significantly increase the price of SOL, but it could also drive institutional adoption and recognition of Solana as a major player in the ecosystem.
In short, while Solana’s future is promising, depends largely on upcoming regulatory changes and political decisions.
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Luc Jose A.
Graduated in Sciences Po Toulouse and holder of a blockchain certification consultant issued by Alyra, I returned to participate in Cointribune in 2019. Conquering the potential of blockchain to transform many sectors of the economy, I have made it my mission to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to allow everyone to better understand blockchain and to know the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to convey the latest technological innovations and to put into perspective the economic and social efforts of this revolution in brands.
DISCLAIMER
The views, thoughts and opinions expressed in this article are solely those of the author and should not be relied upon as investment advice. Do your research before making any investment decisions.