Could the Recent Advancement in Solana Potentially Revolutionize Investments for Its Supporters?
Dive into the buzz surrounding some of the hottest cryptocurrencies currently making waves, with none more intriguing than Solana (SOL -0.38%). This blockchain's popularity and potential growth are soaring, boosted by a remarkable 55% increase in its value during the past three months alone.
But what's got Solana enthusiasts particularly excited? Let's delve into the anticipated event that might revolutionize the coin, its potential consequences on its price, and whether investing in Solana for the long term is a smart move.
Could easy investor access via a new financial tool spark upward price momentum?
Solana, like other major cryptocurrencies, is witnessing a rapid progression in integration with traditional finance systems and cryptocurrency markets worldwide. As part of this adoption process, regulatory bodies, such as the USA's Securities and Exchange Commission (SEC), are evaluating the possibility of approving exchange-traded funds (ETFs) containing Solana.
Should SEC approval be granted, traditional financial investors may flock to these funds, pivotal to pumping more capital into Solana, subsequently causing demand for the primary coin of the chain to rise and potentially driving its price higher.
However, due to the SEC's recent lawsuit against various cryptocurrency exchanges, claiming Solana was an unregistered security, ETF approval delays may be forthcoming, perhaps even extending until 2026. This wait period is further complicated by the incoming, cryptocurrency-friendly Trump administration, whose administration might prioritize SEC leadership and approvals more aligned with its pro-cryptocurrency stance.
Thus, the likelihood of solid approval timelines or approvals for Solana ETFs remains uncertain.
Lessons from Ethereum ETF experience
Solana has a significant competitor in Ethereum (ETH 0.19%). Ethereum boasts prominence as the original hub for decentralized finance, non-fungible tokens, and a myriad of meme coins. Following an older inception and boasting a hefty market cap of over $400 billion compared to Solana's roughly $122 billion, it's Ethereum's ETFs that have already been in operation since July 2024.
Unfortunately, Ethereum's ETF approval hasn't resulted in a pronounced positive effect on the coin's price, indicating that Solana investors might follow a similar path. Let's examine the chart:
Various external factors, such as the general market cooling in late 2024, may have masked Ethereum's ETF impact on its price.
That said, Solana's appeal as a blockchain with swift and cheap transactions and meme coin market gravitation could fuel long-term price growth. However, investors should temper their expectations following the Ethereum ETF experience.
The potential approval of exchange-traded funds (ETFs) containing Solana by the Securities and Exchange Commission (SEC) could attract traditional financial investors, injecting more capital into Solana and potentially increasing its demand and price. Despite Ethereum's ETFs already being in operation since July 2024, their approval did not significantly impact its price, suggesting Solana investors might follow a similar trajectory.
