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Whales are showing interest in the token amid increasing talks about spot Solana ETFs. It comes after Bitcoin (BTC) and Ethereum (ETH) ETF approvals and launches, giving institutional players, like retail, access to the named cryptocurrencies.
The Solana blockchain is popular for its high transaction speeds and low costs. These fundamentals, coupled with a prospective approval, increase demand and liquidity for Solana.
Whales Position Themselves for Solana ETF
The crypto market’s on-chain data and insights source, Lookonchain, reported two whales withdrawing 238,893 SOL worth $41.4 million from the Binance in the past two days. They staked these holdings, suggesting interest in the token and optimism about its potential. Noteworthy, staking demonstrates confidence in the assets while positioning them for rewards.
“In the past 2 days, 2 whales withdrew 238,893 SOL ($41.4M) from Binance and staked it,” Lookonchain reported.
The show of confidence in the possibility of SOL progressing comes amid increasing social dominance around Solana ETF.
Read More: Solana ETF Explained: What It Is and How It Works
Despite only two applications with the US Securities and Exchange Commission (SEC), analysts show optimism about a Solana ETF. Highlighting the popularity of crypto ETFs, senior ETF analyst Eric Balchunas observed that the approval of an Ethereum ETF would pave the way for other similar financial instruments. He named Solana as the likely candidate.
“After the launch of Ether ETFs, there will be additional flows and more Ethereum products, then Solana, and it’s probably never going to end. The dam has broken,” Balchunas stated.
Alongside Balchunas, Nate Geraci, the president of the ETF Store, echoed the sentiment. He said an SOL ETF would follow after Bitcoin and Ethereum, highlighting the possibility of a combined spot BTC, ETH, and SOL ETF.
“We’re quickly heading down a path towards index-based and actively managed crypto ETFs,” Geraci said.
Exploring SOL ETF Prospects
So far, only VanEck and 21Shares have filed to list the financial instrument. The former’s head of research, Mathew Sigel, explained the approval steps of a Solana ETF. Fueling the optimism is the belief that SOL shares Ethereum’s fundamentals regarding decentralization and blockchain characteristics.
“We concluded that Ethereum and Solana, at this point, are fundamentally the same. No single entity controls more than 20% of Solana, nor can they halt the chain unilaterally. Solana is a utility commodity that gives access to the second largest open-source App Store,” Sigel said in an interview with Tony Edward of Thinking Crypto.
The Chicago Board Options Exchange (CBOE) also bolstered the odds, filing form 19b-4s for Solana ETFs. The form invited public commentary, a critical phase in the SEC’s evaluative process.
Nevertheless, while prospects for the Solana ETF spot have changed in recent weeks, it is impossible to ignore the regulatory obstacles that Solana might face before approval.
“The ambiguity surrounding regulatory definitions and enforcement has significant implications for the approval of a Solana ETF,” a Bitfinex blog noted.
Nic, CEO of CoinBureau, cited the absence of a CME futures market, which the SEC typically requires.
Read more: Solana (SOL) Price Prediction 2024/2025/2030
It remains to be seen whether a Solana ETF will hit markets soon. The wildly volatile SOL-based meme coin madness could end with increased regulation if it does. For now, the enthusiasm around Solana ETF keeps holding the price 10% buoyant in the last seven days and 1.2% since Wednesday’s opening. CoinGecko data shows it has outperformed both Bitcoin and Ethereum.