The Potential Impact of U.S. Presidential Election on Solana (SOL) ETF

Under the Biden administration, the possibility of Solana (SOL) having its own ETF in the U.S. seems distant. However, a research note from market-making firm GSR suggests that if Donald Trump were to reclaim the presidency, the chances could be higher than anticipated. The note indicates that under a Trump administration, there might be a shift in the conventional process of launching crypto ETFs, potentially benefiting assets like SOL.

The research suggests that Trump’s administration could introduce more permissive digital asset regulations, paving the way for the launch of spot digital asset ETFs. As a result, Solana, being a prominent crypto asset with significant market demand and decentralization, could be among the first to gain from such regulatory changes.

According to GSR’s analysis, the launch of a spot ETF for Solana could have a substantial impact on its price, potentially surpassing the gains experienced by Bitcoin when its spot ETF was introduced. Given Solana’s attributes and market demand, ETF issuers may be inclined to consider listing it.

GSR’s research highlights that if Solana were to receive even a fraction of the inflows that Bitcoin did prior to its spot ETF launch, SOL’s price could more than triple. In a best-case scenario with higher inflow rates, Solana’s price could increase significantly, presenting substantial upside potential.

Political Uncertainty and Considerations

Despite the potential for a Solana ETF, certain prerequisites need to be met, such as trading for years in a federally regulated futures market. As of now, Solana falls short in this aspect, indicating that it may take years before a Solana ETF becomes a reality.

GSR’s Senior Strategist, Brian Rudick, mentioned that a Trump presidency could bring about the necessary changes for Solana to have a shot at becoming an ETF in the near term. However, this scenario is contingent on Trump winning the election and fulfilling his promises related to crypto.

Rudick also pointed out that the pricing dynamics of Grayscale’s crypto trust products, such as the Grayscale Solana Trust (GSOL), can offer insights into the likelihood of various crypto ETF launches. The premium at which GSOL is trading compared to its net asset value could indicate market sentiment towards a potential SOL ETF.

While the path to a Solana ETF may be uncertain, the research underscores the potential impact of political developments on the cryptocurrency market and the opportunities that could arise for assets like Solana.