Solana Spot ETF is about to land, what is the impact on the market?

The U.S. Securities and Exchange Commission (SEC) recently required several institutions to resubmit revised S-1 filings for the Solana Spot ETF within 7 days, focusing on wording amendments related to the "physical redemption mechanism" and "staking terms." This move is seen by the market as a clear signal of a shift in regulatory stance, quickly igniting bullish sentiment. The price of SOL subsequently surged, briefly breaking through $165, with a single-day increase of up to 5%.

Investors are betting that Solana could become the third cryptocurrency to be included in a mainstream financial Spot ETF after BTC and ETH. Against the backdrop of the ETF trading structure becoming clearer and regulatory signals warming up, the market's focus has shifted from "whether it can pass" to "when it will pass" and "who will launch it."

Regulatory Trends: Solana Enters Review Countdown

The current focus of the SEC is no longer on "whether to allow" the Solana Spot ETF to launch, but on "how to compliantly express the staking and redemption structure of the ETF." Unlike when the Ethereum Spot ETF was approved, which removed the Staking clause, the SEC is now requiring applicants to clarify the staking mechanism details in the S-1 filing, which is widely interpreted as the regulatory agency's attempt to incorporate PoS logic into the regulatory framework.

More importantly, the SEC has committed to completing review feedback within 30 days of the S-1 filing. This means that the landing window for the Solana Spot ETF has opened, and it could be approved as early as mid-July.

Approval Schedule Forecast

Industry insiders expect that after the completion of the S-1 document update, the Solana ETF is expected to receive final approval within the next three to five weeks. James Seyffart from Bloomberg Intelligence stated that he expects approval this year, potentially as early as July.

Bloomberg industry research analyst Eric Balchunas has raised the likelihood of SOL ETF approval from 70% to 90%. He stated: "Get ready for a potential altcoin ETF summer, as Solana may lead the way."

In addition, political factors are also driving the regulatory shift: the current U.S. president's public support for the cryptocurrency industry; the resolutions passed by both chambers of the U.S. Congress to overturn SAB121; and the FIT21 bill under congressional review explicitly proposes an exemption from securities standards for decentralized digital assets, which may place SOL above the compliance threshold.

Solana ETF Issuer Overview

The institutions that have currently submitted applications for a Solana ETF include seven asset management companies: VanEck, 21Shares, Grayscale, Bitwise, Canary Capital, Franklin Templeton, and Fidelity. Among them, Grayscale is planning to convert its existing SOL trust product into a Spot ETF.

After the ETF approval, can SOL take off like BTC?

Refer to the market reaction before and after the approval of the BTC Spot ETF: BTC started around $27,000 in October 2023, experienced a brief 15% drop on the day of the ETF trading launch and the following day, subsequently declining a total of 21%, and then began to soar, reaching a high of $73,000, an increase of nearly 2.7 times.

However, after the approval of the ETH Spot ETF, a similar situation did not occur. From the confirmation of the Spot ETF for ETH in May until the ETF opened for trading on July 23, the price of ETH reacted calmly, with an increase of less than 30%. After the ETF opened for trading for a month, it plummeted more than 30%.

For SOL, if the inflow of funds into the ETF accounts for 5% of the BTC ETF, based on market capitalization, its increase could reach 3.4 times, rising from the current $160 to $500. In a more optimistic scenario, if the inflow ratio reaches 14%, the price could exceed $800.

However, SOL faces several potential risks:

1. Early investors have a very low cost, and the launch of the ETF may become a key point for unlocking exits.
2. The staking ratio of SOL has exceeded 65%, and whether the ETF allows staking of shares remains uncertain.
3. Once ETFs become a mainstream funding channel, on-chain DEXs and the DeFi ecosystem may face liquidity migration risks.

Therefore, before and after the confirmation of the ETF news, the market is likely to still experience a "speculation on expectations, followed by realization" volatility structure.

SOL Investment Outlook

In the short term, the price of SOL may be further driven by capital expectations, impacting the $200-$300 range. In the medium term, whether it can replicate the explosive growth of BTC will depend on two variables:

1. Can the ETF structure design solve the staking problem and truly achieve the dual goals of "on-chain returns + regulatory transparency".
2. Can the on-chain ecosystem support the new traffic and transaction demand, building a solid "capital + application" closed loop.

At the intersection of compliance and mainstream finance for crypto assets, the Solana ETF is not just a product, but a collective stress test for public chain competition, PoS consensus mechanisms, and DeFi applications.