Traders are concerned about the risk of a collapse in the price of the Solana-SOL coin as experts discuss the challenges of approving the establishment of Solana Spot ETFs and the possibility of launching them in 2025, VanEck, 21Shares and other asset management institutions have all applied for the establishment of Solana Spot ETFs earlier this year, and the Securities and Exchange Commission (SEC) has set a deadline for approval or rejection of March March, 2025.
The approval of the creation of spot ETFs for Bitcoin (Bitcoin-BTC) and Ethereum (Ethereum-ETH) this year has raised hopes that Solana will be next, but some experts remain pessimistic, and some fear that the price of SOL will collapse if this pessimism seeps into the markets.
At the time of publication, Solana was trading around $144, a midpoint in its $120-$190 price range in recent months, amid fears that its value could quickly depreciate to $75 as its midpoint if a negative catalyst breaks that range downwards. Now, let’s explore why experts are skeptical about the possibility of launching Solana Spot ETFs in 2025.
Why is the launch of Solana Spot ETFs in 2025 uncertain?
Unblocking payments of currency other than Bitcoin, which has an unmodifiable schedule and is pre-programmed to release new volumes, and Ethereum (ETH), which can move into deflationary state in times of increased activity on its networks; Solana is characterized by inflationary economic data. 20% of its total supply is held pending issuance and transfer in batches to investment firms and large investors such as FTX. Given the enormous unrealized profits of these investors, large quantities of currency are expected to arrive in the markets once theoretically unseized, to sell and make profits.
Below is Caramel X’s account tweet explaining the expiration of the 7.5 million SOL coins and their expected launch on March March, 2025.
The smartestmoney.eth account on X also stated that the circulating coin supply will increase to exceed its average of 165,000 SOL on a daily basis.
Regulators may fear that approving applications to create Solana Spot ETFs could lead to investment firms getting rich at the expense of small investors.
Market novelty BlackRock’s head of digital assets, Robert Mitchnick, expressed doubts about the possibility of launching new ETFs for digital assets during the recent Bitcoin conference in Nashville; Bloomberg ETFs analyst James Seyffart spoke during the same interview, expressing his disbelief that “we will see a long list of ETFs for crypto projects,” noting that BTC alone accounts for 55% of the total market capitalization of the digital asset market, and The percentage of ETH of it is approximately 18%, he added:
“The investable (digital) asset after them represents… 3%, and lags far behind them in terms of total volume, historical data, liquidity, etc.”
The current market capitalization of Solana, at its current price, is approximately $67 billion, or about 2.7% of the sector’s total market capitalization of $2.46 trillion.
Instability of the transaction network Another problem that may hinder regulatory approval of requests to create Solana Spot ETFs is the record of frequent transaction network failures, as the Solana transaction network suffered a standstill during the February February, and it also went through a series of outages for varying periods on dozens of other occasions, which usually has a negative impact on the value of the SOL coin, which can cause damage to investors.
In contrast, the long history of operating almost perfectly without any interruptions was certainly one of the factors contributing to US regulators’ approval of the launch of ETFs for Bitcoin and Ethereum, so network problems are another sign of Solana’s relative lack of maturity.
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