- According to GSR, Solana’s decentralization and market demand position it to compete with Bitcoin and Ethereum in the spot ETF market.
- Fund firm VanEck submitted an application for an exchange-traded fund (ETF) that would track Solana’s price on Thursday as well.
According to GSR, Solana is currently long the cryptocurrency as it keeps pulling away from the group.
After the introduction of spot Bitcoin ETFs in January and the planned introduction of spot Ethereum ETFs later this summer, GSR highlighted in a note released on Thursday the superior technology of Solana and the evolving political climate in the United States as the reasons why a spot Solana ETF would be the next in line.
The memo was released along with fund manager VanEck’s application for an exchange-traded fund designed to follow Solana’s price.
Democrats’ position against digital assets in a close election year has loosened as a result of Donald Trump’s recent support for the cryptocurrency sector, according to GSR analysts in the research.
They added that while it is unlikely that the current legislative and regulatory framework will adopt regulations allowing the introduction of numerous spot digital asset exchange-traded funds (ETFs), a Trump administration and a liberal SEC Commissioner could do just that.
The possibilities would then really begin to open up with the passage of a bill that defines the digital asset market structure for securities and commodities.
Based on GSR’s assessment, which evaluates such attributes, Solana is poised to enter the spot ETF market alongside Bitcoin and Ethereum due to its decentralization and market demand. Ethereum topped the list by a significant margin, followed by Solana, which significantly outperformed Near, the next closest digital asset.
GSR also outlined the three main reasons Solana has a competitive advantage because to its technology, beginning with its proof-of-history.
Proof-of-history allows validators to create blocks when it’s their turn without the network having to initially agree upon the current block, much like cell towers alternate transmission to prevent noise, the company stated. This results in enormous performance and scalability advantages.
Second, according to GSR, Solana makes it possible for parallel transaction processing to benefit from the primary driver of speed increases in computing, which is now achieved more often by increasing cores than by enhancing the efficiency of each one. This allows for a significant boost in throughput.
In conclusion, GSR pointed out that Solana’s historically high hardware and bandwidth requirements optimize for speed and security at the expense of decentralization, but it’s in a naturally advantageous position to gain as costs gradually decline.
Who knows, maybe it will be the first to truly solve the blockchain trilemma and realize its ultimate goal of synchronizing the world’s state at the speed of light.
SOL might do better than BTC.
Regarding the effect on SOL, GSR observed that BTC increased in value by 2.3 times, from $27,000 in October (when investors started to believe that a U.S. spot ETF would be approved) to its current price of almost $63,000.
GSR research indicates that Solana might increase by 1.4x in the bear flows scenario, 3.4x under the baseline scenario, and 8.9x under the blue sky scenario.
Furthermore, as SOL is actively utilized for staking and within decentralized applications, unlike BTC, and because the relationship between relative flows and relative size may not be linear, there are reasons to suspect the impact could be bigger than these predictions.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
