SEC Releases Key Signal: Is the Solana ETF Back on the Agenda Again?

Original Title: "Spot ETF Could Launch as Early as July: Can Solana Replicate BTC’s Explosive Growth?"

Original Author: Ethan, Odaily Planet Daily

On June 11, the U.S. Securities and Exchange Commission (SEC) notified several institutions planning to issue a Solana spot ETF, requiring them to resubmit revised S-1 filings within 7 days. The revisions focus on clarifying terms related to the "physical redemption mechanism" and the "staking provisions." This move is widely viewed by the market as a clear signal of a shift in regulatory stance, sparking bullish sentiment rapidly. SOL prices surged immediately, breaking through $165 in the short term, with a single-day gain peaking at 5%.

Investor sentiment soared, with many betting that Solana could become the third cryptocurrency, after BTC and ETH, to be integrated into mainstream finance through a spot ETF. As the ETF trading structure becomes clearer and regulatory signals warm up, the focus of the market has shifted from "if it will be approved" to "when it will be approved" and "who will launch it."

Regulatory Developments: From Unimaginable to Gradual Acceptance, Solana Enters Countdown to Review

The SEC's current focus is no longer on "whether to allow" the listing of a Solana spot ETF but rather on "how to properly structure the ETF’s staking and redemption mechanics in a compliant manner." To understand the significance of this S-1 revision, we need to revisit the SEC’s earlier stance on the ETH spot ETF.

On May 24, 2024, the Ethereum spot ETF was approved, with the core reason being the SEC’s eventual decision to abandon questioning whether ETH is a security. Additionally, the ETF structure explicitly excluded staking-related terms. This allowed the SEC to classify it as a "commodity-based ETF" and bring it under the traditional asset regulatory framework.

By comparison, Solana, being a chain that heavily relies on Proof-of-Stake (PoS), has always faced compliance scrutiny regarding its staking mechanism. This time, the SEC’s requirement for applicants to clarify staking details in the S-1 filings has been widely interpreted as the regulator "no longer avoiding the topic of staking" but rather attempting to incorporate PoS logic into its regulatory framework. According to Staking Rewards data, as of June 12, Solana’s staking ratio is 65.44%, with a staking yield of 7.56%, more than double ETH’s 3.13%.

More importantly, the SEC has also pledged to complete the review feedback within 30 days of the S-1 filing submission. This is extremely rare in past review processes for Bitcoin and Ethereum spot ETFs, suggesting that the window for a Solana spot ETF launch has opened, with approval potentially coming as early as mid-July.

Approval Timeline Prediction: SOL ETF Could Pass As Early As July

According to foreign media outlet Blockworks, sources anticipate that the Solana ETF could receive final approval within three to five weeks after these S-1 filings are updated.

James Seyffart of Bloomberg Intelligence stated that he expects approval to be granted this year, possibly as early as July. In a report released earlier this week, Seyffart wrote, "We believe the SEC may now focus on addressing Solana's 19b-4 filing and staking ETFs sooner than planned. Issuers and industry participants may have been working with the SEC and its cryptocurrency task force to frame regulations, but the final deadline for the agency to make decisions on these filings is not until October."

In April this year, Bloomberg Intelligence analyst Eric Balchunas remarked that he had raised the approval likelihood for the SOL ETF from 70% to 90%. In his latest tweet, Balchunas stated: "Get ready for a potential altcoin ETF summer, with Solana potentially leading the charge (alongside some basket products)."

Moreover, political factors are subtly driving a regulatory shift: current U.S. President Trump’s high-profile public support for the cryptocurrency industry; the U.S. Congress overturning SAB 121 through bipartisan agreements, essentially nullifying restrictive accounting policies on crypto assets; and the FIT21 Bill under congressional review, which explicitly proposes exempting decentralized digital assets from securities classification. SOL appears to be crossing the threshold of compliance in this environment.

In summary, the approval process for a Solana spot ETF has transitioned from being "out of reach" to one with a "clear pathway." This indicates that it has entered the final stage of the compliance battle.

Who’s in Line? A Comprehensive Overview of Solana ETF Issuers

The competition for a Solana ETF began with VanEck’s submission of an S-1 filing last year, followed closely by filings from 21Shares and Bitwise.

Currently, the institutions that have submitted applications for a Solana ETF include VanEck, 21 Shares, Grayscale, Bitwise, Canary Capital, Franklin Templeton, and Fidelity, all of which are awaiting the SEC's final decision on their applications for a Solana ETF. Among them, Grayscale, taking inspiration from its success with BTC and ETH spot ETFs, plans to replicate the same model by converting its existing SOL trust product into a spot ETF.

Image Source: @Shibo

Will SOL Soar Like BTC If Its ETF Gets Approved?

Lessons from BTC ETF:

Looking back at the market reaction before and after the approval of BTC spot ETFs between late 2023 and early 2024: BTC started from around $27K in October 2023. On the day of its spot ETF launch and the following day (January 11-12, 2024), BTC experienced a short-term drop of 15%, followed by a cumulative decline of 21%. However, it then began a remarkable bull run, reaching an all-time high of $73K—a nearly 2.7x increase.

However, such "rosy expectations" did not materialize in ETH's case. After ETH's spot ETF was confirmed in May, right up until its ETF officially opened for trading on July 23, ETH's price response remained muted, with gains of less than 30%. A month after the ETF started trading, ETH saw a decline of over 30%.

While the approval of an ETF is undoubtedly significant for the long-term legitimacy of cryptocurrencies and the inflow of institutional funds, short-term price performance is often influenced by market expectations and the "buy the rumor, sell the news" phenomenon. For ETH, its ETF approval likely served more as a validation of existing market expectations rather than introducing any new, unpriced catalysts. Additionally, another factor limiting its impact was the fact that ETH's ETF was a "stripped-down version" without staking yield mechanisms, which made it less attractive to users.

If SOL's ETF Gets Approved, How Much Upside Potential Does It Have?

According to the GSR model, if the inflows into a SOL ETF amount to 5% of those into a BTC ETF, its price could potentially surge by 3.4x based on market capitalization, rising from the current $160 to as high as $500, and potentially targeting the $400–$500 range. In a more optimistic scenario, if the inflows reach 14%, the price might exceed $800.

However, caution is warranted regarding the potential selling pressure on SOL. Early investors in SOL had extremely low entry costs, and the launch of an ETF might present a key exit point. Additionally, SOL’s supply dynamics differ from BTC and ETH: over 65% of its supply is staked, and whether an ETF would permit staking of its shares remains uncertain. If staking rewards are excluded from the ETF structure, SOL in a spot ETF could become less attractive due to not capturing on-chain yield. Moreover, if the ETF becomes a mainstream capital channel, on-chain DEXs and the DeFi ecosystem may face risks of liquidity migration.

As a result, the market will likely experience a “buy the rumor, sell the news” pattern around the ETF announcement, similar to the price cycles seen before and after the launch of BTC ETFs.

Is SOL Worth a Heavy Bet?

Based on currently available information and market feedback, a Solana spot ETF is expected to receive official approval in the next 2–3 weeks, potentially becoming another “mainstream entry point” following BTC and ETH. In the short term, SOL’s price could be further driven by capital inflows, targeting the $200–$300 range. In the medium term, whether it can replicate BTC-style explosive growth will depend on two key factors:

1. Whether the ETF structure can address staking issues, achieving the dual goals of “on-chain yield + regulatory transparency”;

2. Whether the on-chain ecosystem can absorb the additional traffic and trading demand, creating a robust “capital + application” closed loop.

At the intersection of crypto asset regulation and mainstream finance, the Solana ETF is not just a financial product but also a collective stress test for public chain competition, the PoS consensus mechanism, and DeFi applications.

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