Crypto: Solana ETFs Struggle to Convince!

While Bitcoin ETFs are experiencing unprecedented success, the future of Solana ETFs seems much more uncertain. Crypto industry experts are indeed questioning the viability and appeal of these new investment vehicles based on SOL.

In this week’s Sygnum research livestream, Katalin Tischhauser, Sygnum’s Head of Investment Research, gave her take on the Ethereum ETFs and what’s next:

✅ Slow start
"On the first day, inflows were strong as seed money came in but net flows have turned negative since then. The… pic.twitter.com/uq4P1nCFZE

— Sygnum Bank (@sygnumofficial) August 15, 2024

Weak Demand for Solana ETFs According to Experts

Katalin Tischhauser, head of research at Sygnum, highlights the lack of interest from American investors in Solana ETFs. She points to the disappointing performance of the Grayscale Solana Trust (GSOL), whose assets under management are capped at $70 million. This figure seems paltry compared to the $30 billion managed by the Grayscale Bitcoin Trust before its conversion to an ETF.

This disparity reflects Solana’s limited notoriety compared to the giant Bitcoin. Despite an unusually high premium of more than 700% on the net asset value of GSOL, Tischhauser believes it will not have a significant impact on the crypto market.

A Striking Contrast with the Success of Bitcoin and Ethereum ETFs

Bitcoin and Ethereum ETFs recorded record inflows in 2024, totaling nearly $63 billion in assets under management. Dave LaValle, global head of ETFs at Grayscale, highlights that BTC ETFs saw more than three times the largest annual inflow of any exchange-traded fund in history.

This massive adoption has triggered a wave of speculation about the next crypto assets to be launched as ETFs. However, the prospects for Solana seem less promising. BlackRock has already expressed its lack of interest in a SOL ETF. The reason given: a lack of interest from its clients.

While some smaller ETF issuers may find a financial interest in launching Solana products, the impact on the crypto market is likely to be limited. The future of these digital assets therefore remains uncertain in the face of the overwhelming dominance of Bitcoin and Ethereum.