Ethereum
Solana ETFs and the massive SOL gain real potential under Donald Trump, says GSR
Under the Biden administration, Solana (GROUND) It appears that Bitcoin is no closer to getting its own ETF in the United States. But, according to market-making firm GSR, if Donald Trump takes back the White House, he could be closer than many observers think and, in terms of price, have much more upside potential than bitcoin. (BTC) did so when its cash ETF debuted.
The U.S. presidential election could be a breakthrough for additional crypto ETFs like SOL, according to the research note shared with CoinDesk. If Trump becomes president again, he could upend the established playbook for launching crypto ETFs, which typically takes years and begins with the introduction of federally regulated futures contracts — something Solana lacks.
“It is even likely” that his notional administration will implement permissive digital asset regulations that allow the launch of a “myriad of digital spot asset ETFs,” the memo said. If this happened, SOL, one of the biggest crypto assets behind ether BTC and Ethereum (ETH) (who already have American ETFs), could be the first to benefit.
“Solana is poised to launch a spot ETF if and when additional spot digital asset ETFs are permitted in the United States, and the price impact may well be the largest yet,” the market maker’s note said.
According to GSR’s internal calculations, Solana is one of the few crypto assets with high demand in the market whose network also exhibits a high degree of decentralization. The market maker said these attributes should guide the willingness of potential ETF issuers to pursue a listing.
The price of Bitcoin more than doubled in the months before and after the launch of its spot ETF, GSR said. If SOL only sees 5% of the inflows than BTC, its price could more than triple. GSR considered this inflow rate a “baseline” scenario, as Solana investment products saw 5% of bitcoin inflows between 2021 and the end of 2023, before crypto-ETF fever took hold.
“Sky blue” inflow rates of 14% could see the price of Solana increase almost nine times, according to the GSR note. These numbers are only a fraction of those for bitcoin, but given Solana’s smaller size, they have much greater price action potential.
There’s no ETF price action for Solana without a Solana ETF. And the asset hasn’t checked the all-important box of having traded for years on a federally regulated futures exchange, as Bitcoin and ether (which are expected to get their own ETFs soon) have. That means it’s years away from launching according to the current playbook.
“All you really need is for Donald Trump to become president and then you will be subject to whatever he wants to do,” said GSR senior strategist Brian Rudick, who wrote the memo.
If Trump wins the election and follows through on his campaign promises regarding cryptocurrency, he could make the changes necessary to give SOL a near-term chance of becoming an ETF.
But that’s a big “if.” And the market has yet to really signal its buy-in to that “if,” if a niche metric for tracking the likelihood of various crypto ETFs launching, Grayscale’s crypto trust product price spread, is referenced.
“If there was a higher chance of a SOL ETF collapsing, what you would see is the price collapse of the Grayscale Solana Trust (GSOL),” he said.
At press time, GSOL was trading at a roughly 750% premium to net asset value, a staggering gap that Rudick said would collapse if Grayscale converted it to an ETF, as it does. was produced with its Grayscale Bitcoin Trust (GBTC) when it became an ETF.
Rudick cautioned that the comparison isn’t foolproof because GSOL doesn’t have much liquidity, meaning its holders don’t have many buyers willing to divest their overvalued trust shares.