A new report predicts a significant increase in Solana’s price if an exchange-traded fund (ETF) is approved Solana (CRYPTO:SOL).
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The report, by market maker GSR, suggests that regulatory changes under the Trump administration could pave the way for a Solana ETF, leading to significant inflows and a corresponding increase in the price of SOL.
The case of an ETF on Solana
With the Bitcoin (CRYPTO:BTC) ed Ethereum (CRYPTO:ETH) that have or are in the process of securing spot ETFs, GSR says Solana will likely follow suit.
Jamie Coutts GSR highlights the changing regulatory environment, particularly with Donald Trump’s renewed support for the cryptocurrency industry.
This change has already led to bipartisan legislative actions such as the reversal of the SEC’s SAB 121 cryptocurrency accounting policy and the FIT21 “cryptocurrency bill.”
Coutts says, “Not only is this scenario possible, it could be likely,” indicating that a Trump administration and a supportive SEC could facilitate approval of a Solana ETF.
Price Comparison: Solana vs Bitcoin
GSR’s report highlights the potential impact of a SOL ETF by comparing it to the experience of Bitcoin. After the approval of spot Bitcoin ETFs, the price of Bitcoin increased from $27,000 to around $63,000, a 2.3-fold increase.
GSR uses this data as the basis for estimating Solana’s potential price increase.
Given Solana’s smaller market capitalization compared to Bitcoin, the report adjusts potential inflows accordingly and outlines three scenarios:
- Bear scenario: Solana’s global investment products AUM is 2% that of Bitcoin, with a 1.4x price increase.
- Scenario baseSolana’s investment products have received 5% of cumulative inflows compared to Bitcoin, suggesting a 3.4-fold price increase.
- Scenario Blue Sky: Over the past two years, Solana’s relative inflows have been 31% and 9% of Bitcoin’s, indicating an 8.9x price increase in this scenario.
Key Metrics & Analytics
The report assesses Solana’s decentralization and demand, which are critical factors in the ETF’s approval. Solana scores highly on decentralization metrics, including the Nakamoto Coefficient, staking requirements, and governance ratings.
In terms of demand, Solana’s strong market indicators, active community and significant market capitalization position it well.
“While a spot ETF on Solana could see percentage inflows equal to 2.3 times the rise in Bitcoin due to spot ETFs, we must now adjust the impact a spot ETF can have on SOL for its smaller size,” we read in the report.
With Solana averaging 4% of Bitcoin’s market cap over the past year, GSR expects Solana to rise 1.4x in a bear scenario, 3.4x in a base case, and 8.9x in a blue sky scenario.
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