SOL Soars to $161: ETF News Sparks Excitement or Just Hype?
Solana ETF Launch: Initial Hype Meets Institutional Hesitation
Overview of the Solana ETF Launch
The introduction of the first Solana exchange-traded fund (ETF) featuring staking capabilities generated significant buzz, yet interest from institutional investors appears to be tepid. Despite a notable price increase for Solana’s native token, SOL, ongoing challenges such as token unlocks and low activity levels on the network could hinder any lasting price gains.
Initial Market Reaction to the ETF
On Monday, SOL experienced a 7% surge following the announcement of the ETF’s launch, scheduled for Wednesday. This development led traders to speculate about the potential for increased institutional interest and the possibility of SOL’s price exceeding $200. Initially, the token climbed to $161 before settling at $157, reflecting a 4% increase from the previous day.
The ETF, developed by REX Shares in collaboration with Osprey Funds, utilizes a taxable C-corporation structure to expedite its launch, circumventing the usual approval process from the U.S. Securities and Exchange Commission. This approach contrasts with the traditional spot ETFs for Bitcoin and Ethereum available in the U.S.
Challenges Facing SOL’s Price Growth
Despite the initial excitement surrounding the ETF, traders soon adjusted their expectations, recognizing that similar products could emerge for a variety of altcoins. Additionally, Grayscale’s Solana Trust, which has been operational for over two years, manages only around $75 million in assets, a stark contrast to the $10 billion held by Grayscale’s Ethereum Trust prior to the launch of the Ethereum spot ETF in July 2024. This disparity suggests that the anticipated institutional demand may not significantly influence SOL’s price trajectory.
Factors Limiting SOL’s Performance
Even if Solana enjoys a temporary first-mover advantage, this could be offset by the impending unlocking of SOL tokens and selling pressure from decentralized applications (DApps) within the ecosystem. According to DefiLlama, approximately $585 million worth of SOL is set to be unlocked from staking in the coming two months.
Moreover, several successful DApps on Solana have been actively liquidating their SOL holdings. For instance, the token launch platform Pump has transferred over $404 million worth of SOL to exchanges in 2025 alone, as reported by Onchain Lens. This selling activity contributes to SOL’s performance closely mirroring that of competitors like Ethereum and Binance Coin over the past month, despite the positive ETF news.
Analyzing Trader Sentiment and Market Dynamics
The SOL futures funding rate offers insights into trader sentiment. When bullish sentiment is high, this rate can exceed 10% annually. Conversely, during bearish phases, it can turn negative as short sellers incur costs to maintain their positions. Despite a 12.5% increase over four days, SOL’s funding rate has not surpassed the neutral 10% mark.
Currently priced at $157, SOL remains 47% below its all-time high of $295, and on-chain data indicates a lack of recovery in network activity. Even with the excitement surrounding memecoins, Solana’s network revenue has plummeted by over 90% since January.
Competitive Landscape and Future Outlook
The decision by Robinhood to launch tokenized stock trading on an Ethereum layer-2 network has further diminished Solana’s standing as the go-to platform for high-output DApps. Additionally, Coinbase’s recent partnership with Shopify to facilitate on-chain payments on the Base network, which ultimately relies on Ethereum, poses further challenges for Solana.
At this juncture, there is little indication that the launch of the Solana ETF will catalyze a price rally to $200, especially given the increasing competition and the lack of substantial demand for existing Solana Trust products.
This article is intended for informational purposes only and should not be construed as legal or investment advice. The opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.
