Executive Summary
JPMorgan analysts project spot Solana exchange-traded funds will soon gain approval but attract limited first-year inflows, estimated at $1.5 billion, significantly less than Bitcoin or Ethereum ETFs, impacting market sentiment for the asset.
The Event in Detail
The U.S. Securities and Exchange Commission (SEC) is poised to decide on numerous spot crypto ETF applications, including those for Solana and XRP, with a final deadline for Solana ETFs set for October 10. Industry observers estimate the probability of approval at nearly 100%. This optimism is partly driven by the existence of established futures contracts for Solana on the CME, a factor previously cited for Bitcoin and Ethereum ETF approvals. Furthermore, the first Solana spot ETF, launched by REX Osprey in July, was registered under the Investment Company Act of 1940, distinct from the Securities Acts of 1933 and 1934 under which most other spot crypto ETFs are filed. Market sentiment has already reflected anticipation, with the premium of the Grayscale Solana Trust (GSOL) to its net asset value falling from over 750% last year to near zero, mirroring a pattern observed with Grayscale's Bitcoin and Ethereum trusts prior to their conversions into spot ETFs.
Market Implications
Despite the high likelihood of approval, JPMorgan analysts, led by Nikolaos Panigirtzoglou, project limited investor demand for Solana ETFs. They estimate approximately $1.5 billion in net inflows during the first year of operation. This figure represents about one-seventh of the $9.6 billion in net inflows observed for Ethereum ETFs in their inaugural year. This projection is grounded in early data from the REX Osprey Solana ETF, which has garnered around $350 million since its July launch, compared to the $2.3 billion in inflows attracted by spot Ethereum ETFs (excluding Grayscale) within their initial three months. Analysts note a similar 1/7th ratio when comparing Solana's DeFi Total Value Locked (TVL) to that of Ethereum, suggesting a proportional market response to institutional investment vehicles.
JPMorgan analysts attribute the projected lower inflows to several factors. These include a weaker investor perception of Solana relative to Ethereum as a primary DeFi and smart contract platform. Concerns were also raised regarding a decline in on-chain activity, such as falling active addresses, since November 2024, and the network's significant dominance by memecoin trading. Additional considerations include potential "investor fatigue" resulting from a proliferation of spot ETF launches, increasing competition from diversified crypto index funds and corporate treasury products offering yield, and subdued demand evidenced in CME Solana futures. These factors collectively temper expectations for substantial capital allocation into Solana ETFs.
Broader Context
While JPMorgan projects conservative inflows for Solana ETFs, the Solana network has demonstrated robust growth metrics. Solana's Total Value Locked (TVL) increased by 8% over 30 days to $14.2 billion, maintaining its position as the second-largest network with an 8% market share. Network activity has surged, with a 22% rise in seven-day fees and decentralized exchange (DEX) volumes growing significantly, including Pump (78%), Meteora (73%), and Raydium (46%). This propelled Solana's 30-day DEX volume to $129 billion, surpassing Ethereum's $114 billion. Furthermore, Solana ETFs and ETPs collectively attracted $706 million in weekly inflows through September 5, exceeding XRP instruments' $219 million. The native token, SOL, recently climbed to $229, with traders eyeing the $300 price level. However, a cautious sentiment persists among some traders, reflected in the Solana perpetual futures funding rate remaining below the 6% neutral threshold, signaling muted demand for bullish leveraged positions. This cautious approach may also stem from growing competition from other blockchains, such as BNB Chain, which recently saw memecoin surges.
source:[1] JPMorgan says Solana ETFs could see low inflows of around $1.5 billion in first year | The Block (https://www.theblock.co/post/374019/jpmorgan- ...)[2] JPMorgan says Solana ETFs could see low inflows of around $1.5 billion in first year (https://vertexaisearch.cloud.google.com/groun ...)[3] Solana (SOL) Price: ETF Decisions Expected October 10 as Network Activity Surges (https://vertexaisearch.cloud.google.com/groun ...)
Edgen Crypto·Oct 09 2025, 14:55
