Solana's price may see a substantial rise following reports of a potential ETF approval. GSR Markets' analysis suggests that Solana's increasing market capitalization and utility make it a strong candidate, with a spot ETF potentially increasing SOL's price up to ninefold.

Solana's Potential ETF Approval Could Trigger Major Price Surge, Says GSR Report

Following reports (via ZyCrypto), an incoming exchange-traded fund (ETF) that tracks its native asset, Solana (SOL) is poised for a price eruption. However, the approval of spot ETFs could cause prices to skyrocket.

Following the triumph of Bitcoin (BTC) and Ethereum (ETH), Solana is the next in line to receive its raft of ETF products, according to a report by crypto market maker GSR Markets. As indicated by GSR's report, Solana has numerous advantages that merit the approval of the US Securities and Exchange Commission (SEC).

The report immediately emphasizes Solana's increasing market capitalization and utility, which solidified its position among the top seven largest cryptocurrencies. The network's decentralization and staking functionalities are the core of GSR's report on Solana's likelihood of obtaining ETF product approvals from the Securities Commission.

The report suggests that a futures-based ETF may be on the horizon, but a spot ETF tracking SOL is less likely. While a futures Solana ETF is expected to boost asset prices, GSR's analysis points to a potentially staggering impact of a spot ETF on SOL's price, potentially increasing it ninefold.

The market maker's hypothesis is based on a comprehensive study of the influence of spot Bitcoin ETFs on the valuation of the largest cryptocurrency. To ensure accuracy, it disclosed three scenarios. The report predicts a 2% increase in inflows into spot Solana ETFs in a bear case scenario by comparing the value of its global investment product AUM to BTC.

GSR Report Predicts Solana ETF Approval Could Boost SOL Value

A base case scenario monitored the inflow of funds to Solana's investment products between 2021 and 2023, indicating that the products attracted 5% of inflows compared to BTC.

GSR's blue sky outlook is more optimistic and anticipates the potential impact of spot ETFs on Solano by utilizing a 14% average annual relative inflow. The report adjusted the relative flow estimates for each scenario to align with the 2.3x increase in Bitcoin since the launch of spot BTC ETFs to conclude.

According to the report, the approval of spot ETFs could significantly increase SOL's value. In the worst-case bear scenario, SOL is expected to grow by 1.4x. The blue-sky model is even more optimistic, predicting an 8.9x rally, while the baseline model suggests a 3.4x increase. However, the researchers caution that these estimates are conservative at most.

“Moreover, there are reasons to believe the impact could be higher than these estimates, since, unlike BTC, SOL is actively used for staking and within decentralized applications and as the relationship between relative flows and relative size may not be linear,” read the report.

Due to VanEck's filing with the SEC for a Solana-based ETF, SOL's price has increased nearly double-digit. However, skeptics caution that the securities monitor may postpone issuing a response.

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