Solana's ETF Launch Sparks Optimism: Predictions for SOL's Price Surge

2024-07-24, 08:36

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## [TL; DR]
After VanEck and Shares21 filed their <a href="/ar/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a> ETF applications the price of SOL surged by over 32%.

The launch of SOL ETFs may result in the increase of the <a href="/ar/price/solana-sol" target="_blank" class="blog_inner_link">Solana price</a>, liquidity and market capitalization.

If the SEC designates SOL as a crypto security it will disapprove of its ETFs.

## Introduction 
With the way things look, the crypto ETF market will likely expand in the near future after the launch of other exchange traded funds. Spot <a href="/ar/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> ETFs, launched in January, have attracted much investment in the sector. That was followed by the [approval of spot Ethereum ETFs in June](https://www.gate.io/learn/articles/crypto-pulse-11/3339 "approval of spot Ethereum ETFs in June") this year.

In early July two asset management firms filed their applications for spot Solana ETFs. Despite possible hurdles, the crypto market anticipates the United States SEC to make a final decision on the matter by March 2025. This analysis focuses on the effect of the SOL ETF applications on the SOL price as well as what the future of Solana ETs holds for the crypto market.  
## The Crypto ETF Hits Up: Solana Ready to Join the Fray
The filing of Solana spot ETF applications by two established asset management firms VanEck and 21Shares indicates the potential of the crypto sector in the global economy. VanEck’s filing of an application for its Solana Trust ETF on 27 June was a significant step in making SOL one of the leading crypto assets. On the other hand, it was the first Solana spot ETF application in the United States. Based on the U.S’ assessment requirements and the existing legal time frame the SEC will finalize its decision on the approval or disapproval of the two SOL ETF applications by March 2025. Nevertheless, it can finalize its decision before that date.

The crypto market hopes that Solana will become the third cryptocurrency with spot ETFs in the United States following the launch of the Bitcoin ETFs and the approval of <a href="/ar/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> spot ETFs. There are several reasons why it is the best time for investment firms to consider launching their spot ETFs. First, the current political trend in the United States supports crypto investment initiatives and helps to shape a bright future of Solana and the entire crypto space. For example, Donald Trump, one of the presidential election candidates, has made it clear that he is willing to support the cryptocurrency sector if elected into office. Therefore, if Trump is elected there will be a high likelihood for the approval of at least one Solana ETF.

Second, Solana has been one of the most consistent performers on the market. In general terms, SOL has been performing relatively well since October 2023. To illustrate, the Solana token gained by 17.2% within the last 30 days and by about 518% within the last one year. The following graph indicates the Solana price surge that occurred during the last 365 days. 
![](https://gimg2.gateimg.com/image/article/17218097571.jpeg)
Solana Price Performance for During the Last 1 Year – [CoinGecko](https://www.coingecko.com/en/coins/solana "CoinGecko")

As seen in <a href="/ar/price/the-graph-grt" target="_blank" class="blog_inner_link">The Graph</a>, the Solana price surged from $22.69 in October 2023 to $203.25 in March this year. As of writing, [people can buy Solana](https://www.gate.io/how-to-buy/solana-sol "people can buy Solana") for $162.00. Solana’s price performance, therefore, justifies its inclusion among the cryptocurrencies suitable to have spot ETFs. In addition, the market believes that Solana ETFs will drive its price further as they attract more investment into the 5th ranked cryptocurrency.

## Solana’s ETF Approval and Launch: Key Challenges Ahead 
The desire for the crypto market to have Solana ETFs does not mean the road to their approval and launch will be smooth. Several hurdles lie ahead. Probably, the greatest obstacle is Solana’s classification as a crypto security. In the past, in its lawsuits against leading crypto exchanges that include Kraken and Coinbase the U.S SEC classified Solana as a security. If the regulatory body maintains its stance that SOL is a security then it will not approve its spot ETFs.

Commenting on the possibility of a Solana ETF approval,[ Wagmi, a crypto analyst said](https://x.com/wagmiglobal_/status/1811795829025300906 " Wagmi, a crypto analyst said"), “Historically, the U.S. Securities and Exchange Commission (SEC) has been cautious with crypto-based ETFs, citing concerns over market manipulation and the asset's classification as a security. The SEC's Enforcement Division previously labeled Solana (SOL) as an unregistered security.”

The other issue that may influence the SEC to disapprove a SOL ETF is the absence of Solana futures on the market. It was much easier for the regulatory authority to approve spot ETFs for bitcoin and ETH since they had futures on the market which helped to play down the possibilities of market price manipulation. [Wagmi clarified this point when he/she said](https://x.com/wagmiglobal_/status/1811795829025300906 "Wagmi clarified this point when he/she said"), “The agency has previously required robust market surveillance standards, typically met by assets like Bitcoin and Ethereum due to their active futures markets. Without such infrastructure in place for Solana, ETF proponents face an additional regulatory barrier.”

Read also: [How to Create a Stablecoin on Solana in 2024](https://www.gate.io/learn/articles/how-can-you-successfully-create-a-stablecoin-on-solana-in-2024/3396 "How to Create a Stablecoin on Solana in 2024")
## SOL Price Prediction: Analyzing the Future
The mere news of a possible launch of SOL ETFs sparked <a href="/ar/price/optimism-op" target="_blank" class="blog_inner_link">Optimism</a> in the crypto market which led to a surge in activity on the Solana blockchain. For instance, due to the SOL ETF launch impact its price rose from around $124 to $153 in June alone. Apart from its positive price reaction, its volume also spiked by around 32% from $32.7 million to $43.8 million within the same period.

Also, the rise in the hype surrounding Solana ETF has resulted in new Solana price forecasts. For example, as per a recent [KuCoin publication](https://www.kucoin.com/news/articles/what-is-a-spot-solana-etf-will-it-be-the-next-big-thing-after-spot-ethereum-etfs "KuCoin publication"), Ali Martinez, a renowned [crypto analyst’s SOL price prediction](https://www.gate.io/price-prediction/solana-sol "crypto analyst’s SOL price prediction") indicates that its value may reach $950 before the end of the present bull market. The next graph shows Solana’s possible price trajectory towards the $950 price level. 
![](https://gimg2.gateimg.com/image/article/17218101192.jpeg)
Solana Possible Price Surge – [TradingView](https://www.tradingview.com/chart/SOLUSD/Gs9KUW9o-Solana-repeating-history/ "TradingView")

The above chart indicates the path which SOL may take towards $950. This illustration is based on its 2021 price movement that occurred within a similar set up. This is because some analysts believe that the Solana price may behave in the same manner during the current bull cycle.

However, within the short-term a rise in the demand for SOL may force its price to surge towards $156.93. If the upward momentum is strong enough the asset may reach $165.52. On the contrary, if optimism about Solana decreases its value may fall towards $137.39.

It is important to note that if Donald Trump fails to win the presidential elections in the United States the market prediction that the Solana price will rise towards $950 will be invalidated. For context, Trump has emerged as the U.S presidential candidate who supports the growth of the crypto sector. His words and deeds have shown that.

## Solana Market Analysis: Factors Influencing SOL’s Current Price Trajectory
There are a number of factors that are influencing Solana price movements. Several developments and projects taking place on the blockchain have created optimism in the token which has resulted in a rise in its demand. For instance, on 10 June Circle minted $250 million worth of USDC stablecoin on the Solana blockchain. Thus, Circle’s injection of liquidity in the Solana blockchain as well as the prospect of SOL ETF approval and launch generated much confidence among its investors.

In addition, the flourishing of meme coins on the blockchain has led to a rise in the demand for the token. The success stories of several meme coins that include BONK, Dogwifhat (WIF), WEN, Myro, ANALOS, Book of Meme (BOME), BEERCOIN and MAGA have generated optimism within the crypto ecosystem. That has also led to a rise in crypto investment on the network. All that significantly influenced the SOL price to rise. 
## Looking Ahead: The SOL ETF Launch Impact 
As highlighted earlier on one of the anticipated SOL ETF launch impacts is a strong rally in the long run. Whereas Ali Martinez has predicted the SOL price to reach [$950 GSR’s recent research](https://www.gsr.io/reports/is-solana-eft-next/ "$950 GSR’s recent research") indicates that the SOL ETF launch impact may push its value towards $1,300. The same research indicates that if the United States SEC approves SOL ETFs the Solana market capitalization may rise to $613 billion. This is because the increase in SOL institutional investment will lead to much capital inflow into the asset.

In addition, the Solana ETF approval and launch will likely place SOL among the leading cryptocurrencies alongside bitcoin and Ether. That may result in a rise in its liquidity and a further increase in activity on the network. Finally, the financial market will accept SOL as a worthwhile investment asset. 
## Conclusion
The filing of Solana ETF applications in the United States has generated much optimism within the crypto market which has resulted in a significant rise of the Solana price. So far, two asset management firms, [VanEck and 21Shares, have applied to launch SOL ETFs](https://www.gate.io/blog_detail/4330/daily-news-market-is-volatile-btc-still-faces-huge-selling-pressure-vaneck-and-21shares-plan-to-launch-solana-etfs "VanEck and 21Shares, have applied to launch SOL ETFs"). The successful launch of the Solana ETFs may lead to an increase in SOL’s liquidity, price and market capitalization. 
## FAQs about Solana ETFs
### Is there a Solana ETF?
At present there are no Solana ETFs on the market. However, two asset management firms in the United States, VanEck and Shares21, have filed applications for Solana ETFs.
### Does Grayscale have a Solana Fund?
Grayscale has a Solana Fund called the Grayscale Solana Trust that derives its value from the SOL price. However, the asset management firm does not have a Solana spot ETF.
### How long can Solana reach $10,000?
As a result of its superior technology Solana may reach $10,000. However, there is no current suggested date for it to reach that price level. If the United States SEC approves Solana ETFs the asset may reach a value of $10,000 between 2030 and 2040.
### Who owns Solana?
The Solana Labs, founded by Anatoly Yakovenko and Raj Gokal in 2018, owns Solana. SOL is the native cryptocurrency of the Solana, a blockchain that uses the proof-of-stake consensus mechanism.
 
<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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