When Can We Expect a Solana ETF? Experts Weigh In

VanEck’s landmark filing of the world’s first Solana ETF has been met with both excitement and cynicism by the financial world. While some commentators dismissed the ETF’s approval as unlikely, others suggest we may see a Solana ETF traded on Wall St by March 2025.

Bloomberg Analysts Suggest SOL ETF Approval Hinges on Changes in White House

Musing on yesterday’s announcement, Bloomberg analyst James Seyffart expressed a cautious outlook on the fate of a Solana ETF. According to Seyffart, the eventual approval relies on a change of administration in the United States government. Even in the case of a Republican presidency, approval is still not guaranteed.

Much of this skepticism is based on the fact that there are no current Solana futures ETFs in the United States. Financial experts have long believed that the general regulatory pathway to a spot ETF demands that a corresponding futures ETF market exists for several years to demonstrate sufficient correlation before approval.

Fellow Bloomberg analyst Eric Balchunas agrees with Seyffart’s position, but admits that it may be a “knee-jerk reaction”, conceding that “anything is possible” if we witness changes in the U.S. government later this year.

Due to VanEck opting for a S-1 filing, no deadline for approval has been given. Seyffart theorizes that, should VanEck make a 19b-4 filing, a deadline for approval could be anticipated in March 2025.

Will Improved Decentralization Metrics Boost Solana’s Chances of Approval?

A recent research report published by GSR, a prominent market maker and venture capital firm, suggests that approval of a Solana ETF is ‘only a matter of time’. The report argues that Solana has established itself as one of crypto’s “big three”, highlighting that the network’s improving decentralization will be a key determinant in the SEC’s eventual decision.

GSR’s report admits that measuring decentralization is a complex and nuanced affair, but highlighted three leading factors in their analysis:

• Nakamoto Coefficient - The minimum number of independent operators required to perform an attack on the network, with a higher score indicating a more secure network and decentralized network.

• Staking Requirements - The minimum stake and hardware requirements to participate in node operation and network consensus.

• CCData Governance Rating - A score that measures governance surrounding participation and transparency.

Indexing the results, GSR found that the Solana network boasted the second-highest decentralization score among Layer 1 blockchains, beating out rivals like Avalanche (AVAX), Aptos (APT), and Cardano (ADA). 

Additionally, the report suggests that the rollout of the Firedancer Validator will bring Solana decentralization to new heights, making Solana the only Layer 1 blockchain, besides Ethereum, with multiple independent clients.

What Would a Solana ETF Mean for SOL Price?

Using Bitcoin price action and inflows as a base of comparison, GSR’s report speculates on the effect a Solana ETF approval could have on the asset’s value. Taking into account relative inflows and Solana’s market position relative to Bitcoin, GSR outlines bullish, bearish, and base cases for Solana growth.

While falling short of VanEck’s lofty bull case of $3,211 per SOL, GSR’s bull base suggests that an ETF approval could spearhead an 8.9x increase in SOL price, pushing SOL as high as $1,290 following an approval. Meanwhile, a bearish outlook would still imply a 1.4x increase, guiding SOL to peak at around $203, based on current price.

While price speculation and the debate surrounding the approval of a Solana ETF is varied and inconclusive, VanEck’s landmark filing has helped legitimize the digital asset in the eyes of traditional financial institutions.

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