Analysis of SOL ETF Prospects

With pro-cryptocurrency U.S. President Trump taking office and SEC Chair Gary Gensler stepping down, the regulatory environment for cryptocurrencies has significantly shifted towards leniency. The new SEC Chair Paul Atkins announced a new vision for cryptocurrencies, stating that a more lenient regulatory policy will be adopted, further strengthening the market's expectations for a Solana ETF. Currently, four institutions, including Bitwise, VanEck, 21Shares, and Canary Funds, have submitted applications for a SOL ETF, and Bloomberg ETF analyst Eric Balchunas predicts a high approval probability of up to 75%.

Previously, the SEC had a conservative attitude towards the approval of ETFs other than BTC and ETH, but Solana has gradually built a compliance foundation of "commodity attributes" by enhancing its decentralization, improving the validator node network, and receiving legal case support. In addition, Rob Marrocco, Vice President of the Chicago Mercantile Exchange, pointed out that if the Solana futures ETF is launched first and accumulates trading volume, it will accelerate the process of launching the spot ETF.

SOL ETF Market Potential: Capital Inflows and Price Forecast

If the SOL ETF is approved, its market impact may surpass that of the Meme coin sector, becoming the first institutional product based on a high-performance public chain. According to Bloomberg analyst James Seyffart's estimates, the total demand for the SOL ETF could reach tens of billions of dollars. Technical analysis shows that the SOL price may break through the symmetrical triangle pattern, with a target price looking up to $1,000.

Historical experience shows that ETFs have a significant catalytic effect on the prices of crypto assets. For example, the Bitcoin ETF attracted over 40 billion dollars in funds in 2024, pushing the price above 100,000 dollars. If the SOL ETF replicates this path and attracts even just 10% of the funds of the Bitcoin ETF, its market capitalization is expected to increase by 460.2 billion dollars, corresponding to a SOL price of about 885 dollars.

Competitive Advantages: Technical Ecosystem and Institutional Layout

Solana's core advantages lie in its high throughput (65,000 transactions per second) and low fees (around $0.00025 per transaction), which positions it as a leader in the DeFi, NFT, and GameFi sectors. By early 2025, the daily trading volume of decentralized exchanges (DEX) in the Solana ecosystem surpassed $60 million, exceeding Ethereum's $38 million, demonstrating the expansion of its practical application scenarios.

At the institutional level, Grayscale has launched a Solana Trust Fund (managing assets of $70 million), while institutions like VanEck are actively exploring the inclusion of SOL in multi-asset ETF portfolios. Polymarket data shows that the probability of SOL ETF approval (84%) far exceeds that of competing products XRP (65%) and Cardano (50%), reflecting the market's recognition of Solana.

Risks and Challenges: Regulatory Ambiguity and Market Volatility

Despite the optimistic outlook, the SOL ETF still faces multiple risks:

• Securities designation dispute: The SEC classified SOL as an "unregistered security" in 2023, although VanEck claimed its commodity characteristics, but the regulatory classification has not yet been definitively clarified;
• Liquidity Dependence: The top 100 addresses of SOL still control 27% of the circulating supply. If the ETF fails to effectively diversify the holding structure, it may raise concerns about manipulation.
• Technical Stability: Although Solana has resolved frequent downtime issues, its historical proof (PoH) mechanism still needs to withstand the long-term test in high-concurrency scenarios.

In addition, the annual inflation rate of SOL (3.8%) contrasts with Bitcoin's deflationary model. If ETF capital inflows fall short of expectations, it may exacerbate price fluctuations.

Future Outlook of SOL ETF

If the SOL ETF is successfully launched, it will mark the official entry of public chain assets into the mainstream financial system. Unlike the "digital gold" narrative of Bitcoin, Solana's positioning leans more towards "high-speed financial infrastructure," and its ETF may attract institutional investors who prioritize technological practicality. At the same time, this could open up a path for compliance for competitors like Avalanche and Polygon, shifting the public chain sector from a "technological competition" to a "dual-dimensional competition of ecology and compliance."

In 2025, the approval of the SOL ETF will not only be a litmus test for regulatory attitudes but also a key turning point for the re-evaluation of public chain values. In the short term, if approved, the SOL price may challenge the historical high of $300; in the long term, it is necessary to observe the implementation of its ecological applications and the process of decentralization. For investors, it is essential to find a balance between regulatory trends, technological upgrades, and market sentiment to seize the historic dividends of the integration of Web3 and traditional finance.

Author: Icing, Gate.io researcher *This article only represents the author's views and does not constitute any trading advice. Investment carries risks, and users should make cautious decisions. *This content is original and owned by Gate.io. If you need to reprint it, please indicate the author and source; otherwise, legal responsibility will be pursued.