Solana ETF hopes are growing as Donald Trump is elected 47th President of the USA, but are Donald Trump Solana hopes real fuel for SOL price?
Fresh off the newly elected 47th President Donald Trump’s victory, Solana ($SOL) is ready for a breakout.
Solana rose to $185.84, off Trump’s win over Kamala Harris, but the next step for SOL is a filing for a Solana ETF; here’s why that could be closer now than ever before.
Solana’s ETF Journey: A New Dawn for Institutional Investment
The concept of a dedicated Solana ETF is not just a strategic move; it’s a potential revolution for Layer One cryptocurrency chains. After Bitcoin and Ethereum successfully secured institutional funds, Solana appears next in line.
Canary Capital, alongside VanEck and 21 Shares, has applied for spot Solana ETFs this year, while Franklin Templeton is reportedly exploring options. Despite the excitement, regulatory challenges loom, particularly concerning the classification of cryptocurrencies and ongoing legal issues with major exchanges.
If approved, a Solana ETF could lead to unprecedented institutional inflows, with predictions of prices soaring north of $400; the ETF could herald a new era of growth and stability for Solana.
The Impact of Memecoin and NFT Activities on a SOL ETF
Solana’s reputation as a high-speed, low-cost blockchain has made it a hotbed for meme coins and NFTs, raking in 34.3% of its revenue from these trendy sectors. Compare that to Ethereum’s mere 6.6% from similar ventures, and Solana’s edge in this niche becomes clear.
Yet, banking on such speculative assets is risky for traditional investors who prefer ETFs. The big question remains—will this chaotic meme ecosystem throw a wrench in Solana’s ETF prospects? The jury is out.
Another problem Solana faces is wash trading, where SOL traders pump up trading volumes by buying and selling simultaneously. With a staggering 41.4% of its meme coin and NFT traffic caught in this web, Solana’s numbers outshine Ethereum’s 28.9% in 2024.
VanEck’s Matthew Sigel notes that SOL’s dirt-cheap transaction fees make it a breeding ground for such antics, and platforms like Pump.fun only fuel the fire by making memecoin trades a cinch. While this frenzy boosts activity, it casts a long shadow over the genuineness of SOL as an ETF.
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The Path to a SOL ETF
The prospect of a Solana ETF is a double-edged sword. On one hand, it promises to attract institutional investments and elevate Solana’s market standing. On the other, the SEC’s scrutiny over wash trading and market manipulation poses significant hurdles.
Due to these concerns, VanEck’s proposed spot SOL ETF includes risk disclosures, highlighting the need for transparency and regulation.
Challenges aside, 99Bitcoins analysts and experts like Sigel are bullish on SOL for its top-notch user experience and potential to evolve past the gambling dens of speculative trading.
While meme coins dominate now, the future could see Solana branching into more stable territories like decentralized infrastructure and social media platforms, redefining its role in the digital landscape.
Addressing Memecoin Wash Trading on the Solana Blockchain
The continued success of Solana in attracting usership and financial activity has rankled some in the crypto community. Some contend that most of Solana’s documented 111M monthly active wallets, compared to Ethereum’s… pic.twitter.com/vch95wuEhT
— matthew sigel, recovering CFA (@matthew_sigel) November 4, 2024
Whether the ETF sees daylight soon or not, SOL is set to outperform Ethereum this cycle, both in price and user base. Riding on its rapid-fire latency and robust throughput, SOL is transforming from a speculative bubble into the most-used layer-1 cryptocurrency.
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