GSR Predicts Solana ETF Approval
GSR predicts Solana is likely to get ETF approval soon due to its decentralization and demand, while Cardano and Ripple face challenges.
GSR, a leading crypto market maker, forecasts that Cardano (ADA) and Ripple’s XRP are unlikely to get ETF approval soon, but Solana (SOL) has better chances. Solana's decentralization and market demand make it a strong ETF candidate. The recent filing of VanEck’s Solana spot ETF highlights growing institutional interest.
Crypto ETFs are a hot topic in the sector. GSR suggests that while Cardano and Ripple may not see ETF approval soon, Solana is on the verge of a significant breakthrough. GSR’s analysis assumes a crypto-friendly regulatory environment in the US, focusing on decentralization and market demand. GSR has also disclosed a long trade position on Solana.
According to GSR, Solana excels in both decentralization and market demand, putting it ahead of its competitors. The blockchain platform's move towards decentralization, especially with its upcoming Firedancer client, and strong market demand, as seen in its positive scores, make it a top ETF candidate.
Solana’s efforts in decentralization are significant. The Firedancer client aims to diversify its network, reduce central control, and enhance resilience. This approach aligns with the decentralized model that regulators prefer.
Solana also shows strong market demand. The asset consistently performs well and has high trading volumes, reflecting investor confidence and potential for sustained demand. This positions Solana well for an ETF, especially when potential inflows are crucial. Considering decentralization and demand scores, GSR calculated an ETF possibility score, with Ethereum (ETH) having the highest score, followed by Solana and NEAR Protocol (NEAR). Other altcoins like Avalanche (AVAX), Aptos (APT), ADA, XRP, and Cosmos (ATOM) have negative scores.
“All in, the results clearly suggest that Solana is next, should additional spot digital asset ETFs be permitted in the US,” GSR wrote. GSR’s analysis also explores the potential impact of ETF approval on Solana’s price. Drawing parallels with Bitcoin’s ETF journey, which boosted its price, Solana could see similar gains. GSR outlines scenarios from a conservative 1.4x increase to an optimistic 8.9x jump under favorable conditions.
“Adjusting our flow estimates based on Bitcoin’s 2.3x increase from spot ETFs suggests Solana may rise 1.4x in a bear scenario, 3.4x in a baseline scenario, and 8.9x in an optimistic scenario,” GSR analysts predicted. VanEck’s recent filing for a Solana spot ETF further supports Solana’s ETF prospects, showing its growing institutional appeal.
Mathew Sigel, Head of Research at VanEck, highlighted Solana’s fit with established digital commodities. “Solana’s decentralized nature, high utility, and economic feasibility match the characteristics of other established digital commodities, reinforcing our belief that SOL is a valuable asset for investors, builders, and entrepreneurs seeking alternatives to traditional app stores,” Sigel said.
