### Solana (SOL) Price Could Skyrocket to $1300 with SEC Approval of Spot ETF
The value of Solana (SOL) is anticipated to soar to $1300 following the SEC’s approval of a spot Solana Exchange-Traded Fund (ETF). A report by GSR indicates that currently, only Bitcoin (BTC) and Ethereum (ETH) meet the fundamental criteria for a spot ETF. Nonetheless, the scenario might change with the election of a pro-crypto president.
Recently, Solana (SOL) has garnered attention after VanEck’s head of digital asset research, Matthew Sigel, revealed that the asset manager has officially filed for the first-ever spot Solana ETF with the US Securities and Exchange Commission (SEC). Subsequently, Crypto News Flash reported that digital asset manager 3iQ also filed for the same ETF product on Canada’s Toronto Stock Exchange (TSE). This move has piqued interest, potentially driving the price higher. With the odds of approval being widely debated, the renowned market maker GSR published a detailed report titled “Is Solana Next?” analyzing the approval possibilities and the subsequent impact on SOL’s price.
The report commended the evolution of the Solana network, highlighting its nearly 300 billion transactions and over $4 billion in Total Value Locked (TVL). This progress is attributed to Solana’s minimal transaction costs, a plethora of decentralized applications, and its expanding user and developer communities.
#### Key ETF Approval Criteria
The GSR report scrutinizes the potential approval of the spot Solana ETF, noting that regulatory bodies expect underlying assets to have a federally-regulated futures market and a futures-based ETF, both existing for several years. Currently, only Bitcoin (BTC) and Ethereum (ETH) meet these criteria, suggesting that other ETFs might not be approved soon. However, this could change with a crypto-friendly president in office.
The report further indicates that decentralization levels and potential demand are crucial factors for the next spot ETF. For demand analysis, issuers evaluate market indicators, Existing Product Asset Under Management (AUM), and Activity Metrics. GSR’s analysis reveals that Ethereum, Solana, and NEAR have above-average scores in these areas. In terms of decentralization, Ethereum, Solana, Avalanche (AVAX), and APT scored higher. Despite this, the SEC has flagged several assets, including ADA, SOL, NEAR, ATOM, and XRP, as securities.
#### Impact of a Potential Spot Solana ETF on SOL Price
The GSR report outlines three potential scenarios for SOL’s price upon SEC approval of the spot Solana ETF:
1. **Bear Case**: Solana’s global investment product AUM is 2% of Bitcoin’s, indicating that the potential ETF inflow might be relatively minimal.
2. **Bullish Case**: Solana investment products gained 5% of cumulative inflows relative to Bitcoin inflows from 2021 through 2023. This represents 5% of their baseline scenario.
3. **Blue Sky Scenario**: In 2022 and 2023, Solana’s relative inflow was 31% and 9% of Bitcoin inflows, respectively. While Solana may not match Bitcoin’s exceptional inflows from 2021 to 2024, its 14% average annual relative inflow is viewed as a potential blue-sky scenario.
Under the bearish scenario, GSR predicts SOL’s price could rise by 1.4x. In the baseline scenario, the price is expected to increase by 3.4x. Finally, under the blue-sky scenario, the price could surge by 8.9x, potentially reaching $1,305 following the ETF approval.
At the time of writing, SOL was trading at $144, having decreased by 2.9% in the last 24 hours.
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