Solana ETFs and Huge SOL Gains a Real Possibility Under Trump, Major Crypto Trader Says

Market maker GSR sees bigger upside for SOL than bitcoin saw when it got U.S. ETFs.

Solana (SOL) is unlikely to get its own exchange-traded fund (ETF) in the U.S. anytime soon under the Biden administration. However, a major crypto market maker believes that if Trump wins the 2024 presidential election, solana ETF might be closer than many observers think.

According to a research note from GSR, the U.S. presidential election could pave the way for additional crypto ETFs, including solana ETF. The note adds that if Trump becomes president again, he could shake up the established playbook for launching crypto ETFs, which usually takes years and begins with the introduction of federally regulated futures contracts. Solana currently lacks solana futures contracts.

However, the note suggests that Trump's administration might implement permissive digital asset regulations that will allow for the launch of "myriad spot digital asset ETFs." If that happens, solana, which is one of the largest crypto assets after bitcoin (BTC) and ether (ETH) (both of which already have U.S. ETFs), could be the first to benefit.

"Solana is poised for a spot ETF if and when additional spot digital asset ETFs are allowed in the US, and the impact on price may just be the largest yet," the market maker's note said.

According to GSR's in-house calculations, solana is one of only a handful of crypto assets with strong market demand that also has a highly decentralized network. The market maker said those attributes are expected to guide prospective ETF issuers' willingness to pursue a listing.

GSR noted that bitcoin's price more than doubled in the months before and after its spot ETF launch. If solana sees just 5% of the inflows that BTC did, its price could more than triple. GSR considered that inflow rate a "base case" because Solana investment products saw 5% of the inflows of bitcoin between 2021 and the end of 2023, before crypto ETF fever took hold.

"Blue sky" inflow rates of 14% could see Solana's price shoot up nearly ninefold, per the GSR note. The figures are only a fraction of bitcoin's, but given Solana's smaller size have far greater potential for price action.

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