Solana ETF Approval Could Trigger Major Price Surge, Says GSR Report

Following reports (via ZyCrypto), an incoming exchange-traded fund (ETF) that tracks its native asset, Solana (SOL) is poised for a price eruption.

Solana (CRYPTO: SOL) price may see a substantial rise following reports of a potential exchange-traded fund (ETF) approval.

GSR Markets’ analysis suggests that Solana's increasing market capitalization and utility make it a strong candidate for an ETF product approval, with a spot ETF potentially increasing SOL's price up to ninefold.

Solana Is A Strong Candidate For An ETF Product Approval, Report Says

Solana is the next candidate to receive a range of ETF products, following the approval of Bitcoin and Ethereum ETFs, a report by crypto market maker GSR Markets highlighted.

The report noted that Solana has several strengths that could lead to the approval of an ETF product by the US Securities and Exchange Commission (SEC).

Solana's increasing market capitalization and utility, which has placed it among the top seven largest cryptocurrencies, is highlighted at the outset of the report.

The network's decentralization and staking capabilities are central to GSR's analysis of Solana's potential to receive ETF product approvals from the SEC.

The report suggests that a futures-based ETF is more likely, while a spot ETF that tracks SOL is less likely.

While a futures Solana ETF is expected to boost asset prices, GSR's analysis points to a potentially staggering impact of a spot ETF on SOL's price, boosting it up to nine times.

The market maker's hypothesis is based on a detailed analysis of the impact of spot Bitcoin ETFs on the valuation of the top cryptocurrency.

To arrive at the estimates, it outlines three scenarios — a bear case, a base case and a blue sky scenario.

The report arrives at the estimates by comparing the value of global investment product AUM to BTC for a granular analysis.

For the bear case scenario, the report anticipates a 2% relative inflow into spot Solana ETFs.

A base case scenario observed the inflows into Solana investment products from 2021 to 2023, indicating that the products attracted 5% of inflows compared to BTC.

GSR's blue sky scenario is more bullish and anticipates the potential impact of spot ETFs on Solano by utilizing a 14% average annual relative inflow.

The report adjusted the relative flow estimates for each scenario to align with the 2.3x increase in Bitcoin since the launch of spot BTC ETFs to conclude.

According to the report, the approval of spot ETFs could lead to a significant increase in SOL's value. In the worst-case bear scenario, SOL is expected to grow by 1.4x.

The blue-sky model is even more optimistic, predicting an 8.9x rally, while the baseline model suggests a 3.4x increase. However, the researchers caution that these estimates are conservative at most.

“Moreover, there are reasons to believe the impact could be higher than these estimates, since, unlike BTC, SOL is actively used for staking and within decentralized applications and as the relationship between relative flows and relative size may not be linear,” read the report.

Solana price had surged nearly double-digit on Friday following VanEck's filing with the SEC for a Solana-based ETF, while skeptics caution that the securities watchdog may delay issuing a response.

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