Here's How Much SOL Could Surge If Solana ETFs Get Approved

A new report has forecasted a significant price increase for Solana if a Solana SOL/USD exchange-traded fund (ETF) is approved.

The report, by market maker GSR, suggests that under a Trump administration, regulatory changes could pave the way for a Solana ETF, leading to substantial inflows and a corresponding rise in SOL's price.

The Case For A Solana ETF

With Bitcoin BTC/USD and Ethereum ETH/USD either having or on the verge of securing spot ETFs, GSR argues that Solana is likely to follow suit.

Jamie Coutts of GSR highlights the changing regulatory environment, particularly with Donald Trump's newfound support for the crypto industry.

This shift has already led to bipartisan legislative actions such as overturning the SEC's SAB 121 crypto accounting policy and the FIT21 “crypto bill.”

Coutts states, “Not only is such a scenario possible, but it may even be probable,” indicating that a Trump administration and a supportive SEC could facilitate the approval of a Solana ETF.

Price Impact Comparison: Solana vs. Bitcoin

The GSR report underscores the potential impact of a Solana ETF on SOL's price by comparing it to Bitcoin’s experience. Following the approval of spot Bitcoin ETFs, Bitcoin's price surged from $27,000 to approximately $63,000, a 2.3x increase.

GSR uses this as a baseline to estimate Solana’s potential price rise.

Given Solana's smaller market cap relative to Bitcoin, the report adjusts the potential inflows accordingly and outlines three scenarios:

• Bear Scenario: Solana's global investment product AUM is 2% of Bitcoin's, leading to a 1.4x price increase.
• Base Case Scenario: Solana's investment products received 5% of the cumulative inflows compared to Bitcoin, suggesting a 3.4x price increase.
• Blue Sky Scenario: In the last two years, Solana's relative inflows were 31% and 9% of Bitcoin's, indicating an 8.9x price increase under this scenario.

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Key Metrics And Analysis

The report evaluates Solana's decentralization and demand, crucial factors for ETF approval. Solana scores highly in 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 cap position it well.

“While a spot Solana ETF could see inflows as a percentage of Bitcoin's 2.3x increase due to the spot ETFs, we must now adjust the impact a spot ETF may have on SOL for its smaller size,” the report states.

With Solana's market cap averaging just 4% of Bitcoin's over the last year, GSR projects that Solana may increase by 1.4x in a bear scenario, 3.4x in a base case, and 8.9x in a blue sky scenario.

For more insights into the future of digital assets and the potential impact of regulatory changes, industry stakeholders can look forward to Benzinga’s Future of Digital Assets event on Nov. 19, where these topics will be explored in detail.

Read Next: VanEck Files Solana ETF Application, SOL Rallies 6%

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