Solana (SOL), the world’s fifth-largest cryptocurrency by market capitalization, has attracted the attention of many businesses due to its low transaction fees and ability to handle large volumes of transactions efficiently. That’s all gone a long way in how much it’s now being accepted across many industries, such as the iGaming, tech, hospitality, and real estate sectors.
These facts about Solana are why this virtual coin has experienced a lot of growth, which caught the attention of traders and investors. The attention Solana has received has led many of these investors and traders to mull over the exponential growth an ETF of this coin could bring. The introduction of a Solana ETF is forecasted to potentially lead to this coin’s price multiplying nine times over, let us see why that is below.
Acceptance as an iGaming Coin
Many online casinos now allow players to bet with cryptocurrencies due to their faster payout speeds and their ability to provide a more private and anonymous experience since they often don’t require things like KYC checks (source: cryptocasino.ltd).
For casinos that accept them, you can use your SOL tokens at over 2500 games like slots, live table games, and more. Its success in this space and many others is down to its innovative blockchain that improved on Bitcoin’s Proof of Work (PoW) and Ethereum’s Proof of Stake (PoS) by pioneering its own Proof of History (PoH) protocols that enable faster and more secure transactions.
GSR Markets’ Report
GSR Markets, which is a crypto market agency specializing in offering risk management strategies and liquidity to investors, among other services, has made an interesting prediction regarding Solana in a recent report. According to this report, should a spot ETF be approved for this cryptocurrency in the United States, its price can potentially multiply nine times over.
Currently, Solana is valued at around $142, which means if GSR Markets’ prediction materializes, this coin’s price could reach $1,280. However, it must be understood why such a bold prediction was made.
A major factor behind GSR Markets’ prediction is that the company believes that a Solana ETF can capture 14% of the inflows that we saw captured by the Bitcoin ETF. What makes this prediction crucial is that it reflects the confidence and interest the market has in Solana as an investable asset.
Price Scenarios
With Solana’s use in various businesses like online stores, anonymous casinos, and even VPN service providers rising, it’s not surprising that many investors are feeling optimistic about an ETF of this token. However, we still need to consider all the scenarios that could unfold with its introduction.
GSR Markets has predicted three scenarios that could happen after the introduction of a Solana ETF. The most optimistic of these is what they call the blue sky scenario. Should a blue sky scenario occur, in addition to this ETF taking 14% of the inflows spot Bitcoin ETFs received since they launched in January, this coin’s market cap will increase significantly.
Solana’s post-ETF market cap is expected to reach $614 billion, which would be an increase of over 840% from the $65 billion this token is currently at. Now let’s discuss the second scenario GSR Markets has predicted, which they have called the baseline scenario. If Solana’s ETF ends up experiencing this scenario, it is expected to attract at least 5% of the inflows that Bitcoin ETFs received this year. Should this happen, the SOL token will see its prices rise moderately, as their value will only be multiplied 3.4 times.
The last scenario that GSR Markets predicted is a bear scenario that would see Solana spot ETFs receive only 2% of the inflows Bitcoin ETFs managed to get. If this occurs, SOL’s price would only multiply 1.4 times. However, what investors should consider is that all these numbers could be bigger if the ETFs also include profits from staking rewards.
Even though a Solana ETF would be very profitable for investors, there will be challenges. These include securing recognition for this coin as a security and factors like who will win the Presidential election later this year. Also, the SEC will ultimately decide on the ETFs for Solana, which can be a lengthy process.
Recent Developments
The good news is that despite the challenges of getting a crypto ETF, several finance companies have started undergoing this process. One of these companies is the asset management firm VanEck, which has applied to offer the first Solana ETF in the US. If the application is approved, VanEck will be able to provide its investors with exposure to Solana’s ecosystem.
Another company that’s applying for a Solana ETF is the Canadian investment fund management firm 3iQ. Should this investment firm’s application be approved, 3iQ will be able to offer Canadian investors the opportunity to track Solana’s performance and the chance to conveniently capitalize on the coin’s growth.
Conclusion
If a Solana ETF is approved, it could boost the token’s price significantly. We’ve seen this already with Bitcoin and Ethereum, where the introduction of an ETF attracted institutional investors, and significantly improved liquidity and demand. However, investors will still need to consider other scenarios that could pan out and regulatory hurdles that could impede the approval of a Solana ETF.
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