SEC Triggers Optimism About Solana ETF Approval

Solana ETFs could soon become a reality! Yes, the SOL ETFs narrative is back in the limelight and this time it is courtesy of the Securities and Exchange Commission (SEC).

Several companies submitted applications for Solana ETFs in the last 12 months. They include Grayscale, Bitwise and VanECK among others and those applications maintained a pending status which could be about to yield into approvals.

Recent reports revealed that the SEC requested Solana ETFs applicants to submit amended S-1 application forms in a week’s time. The request was reportedly aimed at establishing how the companies will approach SOL staking.

The development suggests that the ETFs may have a staking angle, which will allow investors especially institutions to stake for passive gains. If this will be the case, then the Solana ETF approvals will encourage a long term holder approach.

Speaking of approvals, reports also revealed that the SEC might respond within 4 to 5 weeks. In other words, there is a decent change that Solana ETFs will receive regulatory greenlight in July or early August.

Solana ETFs approval expectations trigger market hype

News of Solana ETFs potentially approaching approvals had a noteworthy impact in the market. For example, open interest in the derivatives segment surged to $7.35 billion, which was up by almost $1 billion from its lowest level in the last 7 days.

Options open interest was up about 19% in the last 24 hours. This was accompanied by a 28.6% surge in options volumes, signifying growing interest after the announcement.

There was also a spike in positive funding rates, suggesting that bullish expectations were on the rise. In addition, the number of liquidated short positions was higher at $9.6 million compared to $5.5 million liquidated longs.

The data suggests that the revived conversation around Solana ETFs may potentially trigger more demand in the coming weeks. Such an outcome could lead to a “buy the rumor sell the news” type of scenario.

Ethereum experienced a similar situation before it secured regulatory clearance for ETFs, after which price retreated for a few days after the approval.

However, such an outcome could potentially be on the table but not necessarily a guarantee. Nevertheless, Solana sentiment hovered at 64 in the last 24 hours. A notable improvement from neutral at 41 last week.

SOL price recap: Will the bulls maintain their momentum?

SOL bulls pulled off a 13% percent rally in the last 6 days during which the broader market enjoyed a relief upside. This was after cooling down since the last week of May.

The cryptocurrency traded as low as $141.5 in the first week of June and has since recovered to a $164.8 press time price tag.

Can the cryptocurrency maintain its momentum? SOL bulls appeared to be losing momentum in the last 24 hours. However, with news of Solana ETFs making headlines, the possibility of renewed interest was quite high.

There were a few things to note about the cryptocurrency’s prospects in the coming weeks. If approved, Solana ETFs will likely benefit from a wave of institutional liquidity.

This also comes at around the same time that the U.S governments has been making plans for stablecoin regulation and adoption. In other words, the best possible time for ETF approvals.

The Solana network was arguably one of the top performing blockchains in key metrics in 2024. Its performance may attract a lot of institutional interest which may translate into heavy liquidity inflows.

SOL could therefore be on the verge of recovering back above $200 with ease. A major rally may thus be in the pipeline for the cryptocurrency.

However, those expectations were still highly speculative and may not necessarily guarantee such outcomes.

ETH’s bearish performance after Ethereum ETF approvals was a perfect example of things not always turning out as anticipated.

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