What Impact Could a Solana ETF Have On Its Price?

In January last year, the Securities and Exchange Commission gave the go-ahead for spot Bitcoin exchange-traded funds. This then paved the way for one based on Ethereum. Both had proven successful, Bitcoin slightly more so than Ethereum. However, a new pro-crypto attitude has led to the possibility of further ETFs based on popular altcoins, including Solana.

The possibility of a Solana ETF

The SEC has now received an application for a Solana ETF overseen by four different companies. It was submitted as a 19b-4 form by Grayscale. It has entered into a binding process, meaning a decision must be made on it by October 11th. This will then take it through a five-step process, starting with publication in the Federal Register, consultations, and reviews. This can go on for around 240 days.

An ETF is seen as a means by which more traditional investors can benefit from cryptocurrency, hedging against some of its inherent volatility. They don’t buy the currency directly but buy into a basket of commodities, in this case, Solana. Even if the process is rejected, it could trigger lengthy legal battles. Grayscale themselves have already been in a costly battle with the SEC before. It is one they may or may not wish to repeat.

The Solana price reached its zenith of $293 on January 19th. The coin has been trading on an upward trend since around July 2024, despite one large decline of around 30%. This seemed to spell the end of its bull run. However, a Solana ETF could quite conceivably spark this back into action. It is no secret that Solana is at a crucial juncture, both in its price and future. 

All of this is a very different change of approach. Solana has had previous applications rejected outright, and this is a much better signal of its continuing acknowledgment as a cryptocurrency and investment that is here to stay. However, it also opens up the debate regarding if it is a security, battle that has been waged for some time. This new discussion may see it get reclassified and could open the door for other altcoin ETFs.

It is not the only altcoin that has had applications submitted. Litecoin is at the head of the pack. However, this does not have the practical uses that Solana does: Its blockchain is alive, being used, and becoming increasingly popular for everything from financial products and real estate to entertainment.

Price predictions

Generally, the Solana price has risen despite its volatile peaks and troughs. Essentially, its low points are higher, as are its peaks. At the time of writing, the coin is worth 203.0 USD, following a long week of decline followed by a small rally. If it can maintain this support, it could push it further upwards, even reaching as high as $300, beating its all-time peak. However, lose the support and it may slide back down. This means even without ETF approval, Solana could continue its upward trend and even smash its previous price record. This is due to several other factors backing the coin.

VanEck, the global management and investment firm, is one company that firmly believes in the growth of Solana, both in its blockchain and the subsequent rise of its coin. They are predicting a high of $520 by the end of 2025. This prediction would give it a market cap of $250 billion. This is entirely feasible when you consider that it has risen 105% in the space of a year.

They believe this will primarily come from them expanding their market share in the blockchain sector. Despite being operators of both Bitcoin and Ethereum ETFs, they did not reference Solana ETFs as a factor for growth. Instead, they have pointed out how developers are favoring it. Notable is also its sturdy infrastructure: Solana has not had an outage in over a year. It has also only been live since 2020 and has risen quickly in such a short space of time. However, this has not been without its problems. There have been serious outages in the past, some lasting around 19 hours. This hampered the reputation of the blockchain in its early days. 

There are plenty of factors at play in the rise of Solana. Increased users and infrastructure will inevitably help its growth. However, this will only be so if quality decentralized applications are attached to it. Solana cannot rely on meme coins or continue its association with them too much. What it needs are real-world applications and use by traditional financial institutions. A spot Bitcoin Solana ETF shows its acceptance by mainstream finance, but it may still have a long way to go.