Solana (SOL) ETF Hopes, Rising Fundamentals Are Driving Prices Higher, Traders Say

The total value of tokens locked on Solana has increased over 25% in a month, crossing the $5.28 billion mark to levels not seen since April 2022

Solana (SOL) prices continued their rally Monday morning, rising to new three-month highs as the token outperformed bitcoin (BTC) and ether (ETH) in the past week amid rising expectations of a Solana exchange-traded fund (ETF) product.

SOL prices rose over 18% in the past seven days to trade above $180 early Monday, outpacing bitcoin’s 3.5% gain and ether’s 10% rise in the same period. SOL prices also hit a new three-month high Monday, reaching levels last seen in early May.

The outperformance comes as some market observers pointed to a recent surge in trading activity on Solana-based applications, boosting fundamentals.

“The Solana ecosystem is showing robust growth, evidenced by increased DEX activity, rising daily active users, and growing fee accrual to the network,” Pat Doyle, a blockchain researcher at Amberdata, told CoinDesk. “These strong fundamentals, coupled with the positive market sentiment, are pushing SOL forward.”

Solana’s key appeal among traders lies in its fast settlement speeds and low fees, which have been the basis for meme coin trading frenzies several times in the past year.

In comparison, Ethereum, the world’s largest blockchain by total value locked (TVL) of $60 billion, recorded smaller volumes at $1.7 billion but higher fees at $3 million because it’s more expensive for users to trade on the network.

The rising expectations of a Solana ETF are also boosting SOL prices, traders said.

In early July, the Cboe submitted 19b-4 filings with the Securities and Exchanges Commission (SEC) asking to list VanEck’s and 21Shares’ potential spot Solana ETFs, which were initially filed in late June.

Block traders had told CoinDesk at the time that the filings were expected as the SEC prepares to approve the first spot crypto ETF filings after approving several futures-based products last year.

“The upcoming ETH ETF launch is helping as well – SOL appears poised to be the next token with an ETF, which, given its relatively small size and strong price performance, would be extremely bullish,” Rennick Palley, founding partner at crypto venture fund Stratos, told CoinDesk.

SOL prices hit all-time highs above $260 in late 2021, outperforming bitcoin and ether for much of last year.

SOL prices later crashed over 90% from all-time highs as the broader crypto market slid into a bear market in mid-2022.

SOL prices have recovered over 200% from 2022 lows in the past six months as the broader market recovered.

SOL prices are now up over 700% from 2022 lows, outpacing bitcoin’s 150% gain and ether’s 300% gain in the same period.

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