Solana ETF has a ‘near zero chance’ of approval this year, analysts

Close up of golden Solana cryptocurrency with colorful chart background

In this post:

  • Wintermute CEO Evgeny Gaevoy does not expect a spot Solana ETF approval this year.
  • The crypto community disagrees on whether there will be sufficient demand for a Solana ETF.
  • Observers predict an ETF approval could increase SOL’s price by almost nine times its current value

Wintermute CEO Evgeny Gaevoy has said there is “near zero chance” that a Solana exchange-traded fund will be approved this year. According to Gaevoy, expectations that Donald Trump’s presidency will prioritize regulations that allow other digital assets to launch spot ETFs are delusional.

Also read: Wormhole grant brings Worldcoin ID to Solana

Gaevoy’s statement follows VanEck’s June 27 filing with the US Securities and Exchange Commission for a spot Solana ETF. Following the filing, some market analysts have increased speculation that the SEC might change its tune on the digital asset and approve it for trading.

Analysts say it might be too early for a Solana ETF 

Bloomberg’s Senior ETF analyst Eric Balchunas suggested that a US presidential leadership change could prompt the fund’s approval under a pro-crypto SEC leader like Hester Peirce. This view was also supported by Jake Chervinsky, a leading crypto lawyer, who stated:

“There’s no good reason in law or policy why SOL shouldn’t have an ETF just like BTC and ETH. Yet, I’d guess the SEC will point to the lack of a futures market to justify denial.”

Similarly, crypto market maker GSR speculated that a Trump presidency could lead to regulations that will ease the launch of a spot crypto ETF. The report noted that if the process becomes more permissive, SOL would be the next digital asset to get the stamp of approval from regulators this year.

However, Evgeny Gaevoy, Wintermute’s CEO believes such permissive regulations will not happen this year. He added that a Solana ETF is not feasible yet because there is no demand for it. According to him, even the Ethereum ETFs that have been approved will struggle with inflows when they finally list.

In the statement, he said, “Once you see how little inflows there will be into ETH ETFs (this year), it will be clear how even less flows SOL ETFs would get even if its approved. And I’m saying this all while Wintermute is long both SOL & ETH, so no fud, just being realistic here. Adoption takes time.”

ETF could cause SOL price to increase by 8.9x 

Meanwhile, some in the crypto community are bullish on a SOL ETF happening soon. They noted that the odds of ETH ETF approval were around 12% until a week before the financial regulator suddenly pivoted and approved them. Pseudonymous crypto researcher Kwaker Oats noted no one expects a SOL ETF this year but argued that the applications by asset managers are a sign of demand at some firms, which is a good sign.

Also read: VanEck files first Solana spot ETF application in the U.S.

Believers also disagree with the claim that there is no sufficient demand for the Solana ETF. They point to the fact that Grayscale Solana Trust (GSOL) is currently trading at a premium of around $403 compared to SOL, which is priced at $145, as evidence of sufficient demand.

GSR predicted that a spot SOL ETF could increase the asset’s price by as much as 8.9x its current value in the best scenario. Even in the worst scenario, the price is still expected to double if the spot ETF is approved.

Solana ETF
SOL Price Impact Under Various Inflow Scenarios (Source: GSR)

However, the report emphasized that SOL could perform even better than those estimates if it gets a spot ETF approval. This is because the crypto asset has a much higher upside than Bitcoin. The firm wrote:

Moreover, there are reasons to believe the impact could be higher than these estimates, since unlike BTC, SOL is actively used for staking and within decentralized applications and as the relationship between relative flows and relative size may not be linear.

Many in the Solana community are bullish on its long-term potential, believing it could go as high as $1,000. 0xBorovik, partner at crypto casino Rollbitcom, believes expecting SOL to reach that price is realistic.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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