Solana ETF Could Skyrocket Market Value Amid Changing Regulatory Landscape

GSR recently released its ETF possibility score, ranking ETH, SOL, NEAR, AVAX, APT, ADA, XRP, and ATOM based on decentralization and demand scores. If the SOL ETF passes, its market value could rise significantly. Specifically, in a bear market, it could increase by 1.4 times, while in a bull market, it could surge by 8.9 times.

Solana has cemented its position as part of crypto’s Big Three, joining Bitcoin and Ethereum. Both Bitcoin and Ethereum have or are on the verge of having spot ETFs. Consequently, it is likely just a matter of time before Solana secures one too. The impact on SOL might be the largest yet.

Crypto Tony, a popular analyst, recently shared an update on Solana’s price action. The price is holding firm from the $122 support zone. Flipping the supply zone at $163 would confirm the lows. Solana/US Dollar Tether (SOL/USDT) has seen significant volatility over several months. Despite a recent 2.54% drop, it remains above the 200-day EMA, indicating a long-term bullish trend.

Moving averages show the price above longer-term averages, reinforcing bullish sentiment. Volume bars indicate high trading activity during price surges and declines. The MACD line below the signal and zero lines suggests short-term bearish momentum. Meanwhile, the RSI near its middle range shows neither overbought nor oversold conditions. The price is near the middle of the Bollinger Bands, indicating relative stability.

Currently, the path to a spot digital asset ETF in the US requires a federally-regulated futures market. Only Bitcoin and Ethereum have such markets. These markets must exist for several years to show sufficient correlation. Additionally, a futures-based ETF must be approved before considering a spot product. Hence, no additional spot digital asset ETFs are expected soon.

However, this view underestimates the potential for change. Change is already happening with Donald Trump’s recent support of the crypto industry. This support has led Democrats to soften their stance on digital assets, especially in an election year. Recently, a bipartisan measure overturned the controversial SEC crypto accounting policy (SAB 121) in Congress. Moreover, the House passed a comprehensive digital asset regulatory framework (FIT21).

Although the current legislative and regulatory environment is not ready for numerous spot digital asset ETFs, a future Trump administration could change that. A liberal SEC Commissioner might also support such changes. The possibilities could expand with a securities and commodities-defining digital asset market structure bill. This scenario is not only possible but may even be probable.