- Sygnum suggests investor demand for Solana ETF will be low.
- Solana’s Grayscale Trust has low inflows.
- BlackRock has no plans for a Solana ETF.
Exchange Traded Funds (ETFs) have been widely anticipated in the cryptocurrency space, with many predicting that they will have a positive impact on the market. This is because, unlike traditional cryptocurrency investments, ETFs provide a regulated way for institutions to invest in cryptocurrencies.
For this reason, after the approval of spot Bitcoin and Ethereum ETFs, Solana traders are hoping that SOL will be next. However, things are not looking good as other institutions are expressing skepticism. After BlackRock said there is a lack of institutional demand for altcoin ETFs, Signum Bank also joined in.
Sygnum Bank Expects Declining Demand for Solana ETF
While Bitcoin and Ethereum ETFs have seen some inflows, major banks are skeptical about Solana’s interest, Catalin Tischhauser, head of investment research at Switzerland-based Signum Bank, recently shared his analysis.
In particular, Tischhauser highlighted the lack of investor inflows into Grayscale’s Solana Trust (GSOL), which also tracks SOL. GSOL currently has less than $70 million in assets under management (AUM), a pittance compared to the $30 billion Grayscale Bitcoin Trust managed before it converted to an ETF in January.
According to Tishhauser, the small AUM is due to Solana’s relatively low profile among institutions. Nevertheless, she said GSOL shares are trading at an unusually high premium to net asset value (NAV), more than 7x. This means the shares are worth 7x more than the amount of SOL held by the fund.
According to Tischhauser, “A high premium suggests some demand, but it’s not demand that will have a major impact on the market.”
BlackRock Skeptical of VanEck’s Solana ETF Submission
Like Sygnum Bank, BlackRock has also taken a cautious approach to altcoin ETFs, including Solana. In July, BlackRock’s head of digital assets, Robert Mitchnick, said the firm had seen little client interest beyond Bitcoin and Ethereum.
This insight has tempered expectations for a potential Solana ETF approval following a June 2024 VanEck filing, which at the time was seen as a significant vote of confidence in the asset. Nevertheless, Matthew Siegel, the firm’s head of digital asset research, acknowledged that approval would depend on a change in leadership at the U.S. Securities and Exchange Commission (SEC).
Bitcoin has a notable advantage over Solana, in addition to being a much larger asset. Bitcoin is considered by many institutions to be a countercyclical asset, meaning it often moves in the opposite direction to the market. For this reason, funds hold Bitcoin to reduce overall volatility.
On the other side
- Many analysts believe that whether a Solana ETF will be approved in the United States will also depend on the outcome of the 2024 presidential election.
- that Expected due date VanEck’s Solana ETF approval is expected in March 2025, according to Bloomberg analyst Eric Balkunas.
Why this matters
If the Solana ETF fails to generate significant interest or investment inflows, the expected positive impact on Solana’s price will be limited.
Learn more about Solana ETF Outlook:
Analysts Comment on Solana ETF Outlook Amid New Filings
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