Lightning approval! The SEC has started a 30-day countdown for the Solana Spot ETF, and the "third pole" of the crypto market is on the verge of emerging.

Original author: Ethan Reprinted by: Daisy, Mars Finance

Original title: Countdown to SOL Spot ETF: The market code hidden in the SEC's rare 30-day review period

This move is seen by the market as a clear signal of a shift in the regulatory stance, which quickly ignited bullish sentiment. The SOL price subsequently surged, briefly breaking through $165, with a daily increase of up to 5%.

Market sentiment is rapidly warming, and investors are increasingly betting that Solana may become the third cryptocurrency, after BTC and ETH, to be included in mainstream finance's spot ETFs. Against the backdrop of the ETF trading structure becoming clearer and regulatory signals warming up, investors' focus has shifted from "whether it can pass" to "when it will pass" and "who will launch it."

Regulatory Trends: From Unthinkable to Gradual Acceptance, Solana Enters Review Countdown

The current focus of the SEC 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." To understand why this S-1 amendment is significant, it is necessary to review the SEC's past statements regarding the ETH spot ETF.

On May 24, 2024, the Ethereum spot ETF was approved, primarily because the SEC ultimately abandoned its inquiry into whether ETH is a security, and the ETF structure explicitly excluded staking clauses. This allows the SEC to consider it a "commodity ETF" and integrate it into the traditional asset regulatory framework.

In contrast, Solana, as a heavily PoS-dependent chain, has had the compliance of its Staking mechanism as a focal point of controversy. The SEC's request for applicants to clarify staking mechanism details in the S-1 document has been widely interpreted as "no longer avoiding Staking," but rather an attempt to incorporate PoS logic within the regulatory framework. Staking Rewards data shows that as of June 12, Solana's staking rate was 65.44%, with a staking yield of 7.56%, more than double that of ETH (3.13%).

More importantly, the SEC has also committed to completing its review feedback within 30 days after the submission of the S-1 filing. This is extremely rare in the review process for Bitcoin and Ethereum spot ETFs, and it also means that the window for the approval of the Solana spot ETF has opened, with the possibility of approval as early as mid-July.

Approval timeline forecast, SOL ETF is expected to pass as early as July

According to the foreign media Blockworks, sources expect that after the updates to these S-1 documents are completed, the Solana ETF is likely to receive final approval within the next three to five weeks.

James Seyffart from Bloomberg Industry Research stated that he expects approval to be obtained this year, possibly as early as July. In a report this week, Seyffart wrote, "We believe that the SEC may now focus on processing the Solana 19 b-4 application and staking ETFs earlier than planned. Issuers and industry participants may have been working with the SEC and its cryptocurrency working group to develop rules, but the agency's deadline for making decisions on such applications is not until October."

In April of this year, Bloomberg industry research analyst Eric Balchunas stated that the likelihood of the SOL ETF being approved has increased from 70% to 90%. In his latest tweet, he said: "Get ready for a potential altcoin ETF summer, as Solana may lead the way (along with some basket products)."

In addition, political factors are also quietly driving the regulatory shift: current U.S. President Trump has publicly supported the cryptocurrency industry; both chambers of the U.S. Congress have successively passed resolutions to overturn SAB 121, negating the accounting policies for crypto assets at the legislative level; the FIT21 bill under congressional review explicitly proposes an exemption of decentralized digital assets from securities standards, and SOL may be above the compliance threshold.

Overall, the approval of Solana spot ETFs has transitioned from "out of reach" to the stage of "clear path," which also means that it has officially entered the final phase of regulatory games.

Who is in line? A panoramic view of Solana ETF issuers

The competition for Solana ETFs began with VanEck's S-1 filing submitted last year, followed closely by 21 Shares and Bitwise.

Currently, the institutions that have submitted applications for a Solana ETF include seven asset management companies: VanEck, 21 Shares, Grayscale, Bitwise, Canary Capital, Franklin Templeton, and Fidelity. They are waiting for the SEC's final decision on their Solana ETF applications. Among them, due to successful cases with spot ETFs for BTC and ETH, Grayscale is planning to replicate and convert its existing SOL trust product into a spot ETF as well.

Image source: @Shibo

ETF Approved, Can SOL Soar Like BTC?

Lessons from the BTC ETF:

Refer to the market reaction before and after the approval of the BTC spot ETF from the end of 2023 to the beginning of 2024: BTC started around $27,000 in October 2023, and saw a brief 15% drop on the day of its spot ETF trading launch and the following day (January 11 to 12, 2024), followed by a cumulative decline of 21%, after which it began to surge, reaching a peak of $73,000, an increase of nearly 2.7 times.

However, such "good wishes" have not materialized in ETH. Since ETH confirmed the spot ETF in May, until the ETF opened for trading on July 23, the price of ETH reacted mildly, with an increase of less than 30%. A month after the ETF opened for trading, it plummeted by more than 30%.

Although the approval of ETFs has positive implications for the long-term legitimacy of cryptocurrencies and institutional capital inflow, short-term price performance is influenced by market expectations and the "buy the rumor, sell the news" mentality. Therefore, for ETH, the approval of its ETF may more likely validate the market's previous expectations rather than bring new, unpriced stimuli. On the other hand, the reason also lies in the fact that ETH's ETF is a "stripped-down version" without a staking yield mechanism, which similarly lacks much appeal for users.

What is the potential upside for SOL if it is approved through an ETF?

According to the GSR model, if the fund inflow for the SOL ETF is 5% of that for the BTC ETF, its price increase could reach 3.4 times based on market capitalization, rising from the current $160 to $500, potentially impacting the $400 – $500 range; in a more optimistic scenario, if the fund inflow ratio reaches 14%, the price could exceed $800.

However, it is worth being vigilant about the selling pressure risk of SOL. Early investors in SOL had a very low cost, and the launch of an ETF may become a node for unlocking exits. In addition, the supply structure of SOL differs from that of BTC and ETH: the staking ratio has exceeded 65%. Whether the ETF will allow staking of shares remains uncertain. If staking returns are not included in the ETF structure, the SOL in the spot ETF will lose appeal due to not participating in on-chain rewards. Furthermore, if the ETF becomes a mainstream funding channel, on-chain DEX and DeFi ecosystems may face the risk of liquidity migration.

Therefore, before and after the confirmation of the ETF news, the market is likely to still experience a volatility structure of "first speculating expectations, then realizing them," which is very similar to the price cycle before and after the BTC ETF began trading.

Is SOL Worth Heavily Investing?

Based on the currently available public information and market feedback, the Solana spot ETF is expected to receive formal approval within the next 2 to 3 weeks, becoming another "mainstream entry channel" following BTC and ETH.

In the short term, the price of SOL may be further driven by capital expectations, impacting the range of 200 – 300 dollars; in the medium term, whether it can replicate the explosive growth seen in BTC will depend on two variables:

• Can the ETF structure design solve the collateral issue and truly achieve the dual goals of "on-chain yield + regulatory transparency";
• Whether the on-chain ecosystem can accommodate the new flow and transaction demands, building a solid "funding + application" closed loop.

At the intersection of cryptocurrency assets moving towards compliance and mainstream finance, the Solana ETF is not just a product, but also a collective stress test for public chain competition, PoS consensus mechanisms, and DeFi applications.