Solana Spot ETF is expected to be approved in July, what is the market outlook?

Recently, the U.S. Securities and Exchange Commission (SEC) requested several institutions to resubmit revised S-1 filings for the Solana Spot ETF within 7 days, focusing on wording corrections regarding the "physical redemption mechanism" and "staking terms." This move is seen as a clear signal of a shift in regulatory attitude, quickly boosting market sentiment. The price of SOL subsequently rose, briefly breaking through $165, with a one-day increase of up to 5%.

Investors are betting that Solana may become the third cryptocurrency to be included in a Spot ETF after Bitcoin and Ethereum. As the ETF trading structure gradually clarifies and regulatory signals warm 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 SEC's focus is no longer on "whether to allow" the Solana Spot ETF to launch, but rather on "how to comply with the expression of the ETF's staking and redemption structure." This change is significant, especially considering the SEC's previous attitude towards Ethereum Spot ETFs.

In May last year, the core reason for the approval of the Ethereum Spot ETF was that the SEC abandoned its inquiry into whether ETH is a security, and the ETF structure explicitly excluded Staking clauses. In contrast, Solana, as a public chain that heavily relies on PoS, has faced ongoing controversy regarding the compliance of its Staking mechanism.

The SEC's requirement for applicants to explicitly state the staking mechanism details in the S-1 filing has been widely interpreted as the regulatory body attempting to incorporate PoS logic into the existing framework. Notably, the SEC has committed to completing its review feedback within 30 days of the S-1 filing, which means that the Solana Spot ETF could potentially be approved as early as mid-July.

Approval Timeline Forecast

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

Another analyst, Eric Balchunas, has raised the likelihood of the SOL ETF approval from 70% to 90%. He stated: "Get ready for a potential altcoin ETF summer, 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 resolution passed by both houses of Congress to overturn SAB121; the FIT21 bill proposing exemptions of decentralized digital assets from securities standards, etc.

Overview of Solana ETF Issuers

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

The Market Prospects of SOL after ETF Approval

Referencing the market reaction before and after the approval of the Bitcoin ETF, BTC started at $27,000 in October 2023. After a brief drop of 21% on the day of the ETF's trading launch and the following day, it climbed all the way to $73,000, an increase of nearly 2.7 times.

However, the market performance after the approval of the Ethereum ETF was not as expected. The ETH price reacted calmly after the ETF confirmation, with an increase of less than 30%. A month after the ETF opened for trading, it fell by more than 30%.

For SOL, if the fund inflow of the ETF is 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 fund inflow ratio reaches 14%, the price could exceed $800.

However, the challenges faced by Solana cannot be ignored:

1. The risk of selling pressure from early investors
2. Whether the staking rewards are included in the ETF structure remains uncertain.
3. On-chain DEX and the DeFi ecosystem may face liquidity migration risks.

Conclusion

The Solana Spot ETF is expected to receive formal approval in the next 2 to 3 weeks, becoming another mainstream entry channel after BTC and ETH. In the short term, the SOL price may be further driven by capital expectations, impacting the 200-300 dollar range.

In the medium term, whether SOL can replicate the explosive growth of BTC still depends on two key factors:

1. Can the ETF structure design solve the staking problem and achieve the dual goals of "on-chain yield + regulatory transparency"?
2. Can the on-chain ecosystem accommodate 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 financial product; it is a comprehensive stress test for public chain competition, PoS consensus mechanisms, and DeFi applications.