Solana’s native token, SOL, has surged in price recently, with a notable 17% increase between July 7 and July 9, 2024. After a brief dip to $121, SOL has climbed back to $141, signaling renewed investor confidence. This rally has traders speculating whether SOL might soon breach the $200 threshold once again. Here’s a closer look at the factors driving this bullish trend.
The primary catalyst for Solana’s recent price increase is the excitement surrounding a potential spot Solana Exchange-Traded Fund (ETF). On July 8, 2024, VanEck and 21Shares filed applications with the U.S. Securities and Exchange Commission (SEC) for a spot Solana ETF, sparking a surge in SOL’s trading activity.
The filings were made through the Chicago Board Options Exchange (Cboe), which has previously been at the forefront of listing successful crypto-based financial products, including the first U.S. spot Bitcoin ETFs and upcoming spot Ether ETFs.
Rob Marrocco, global head of ETP listings at Cboe Global Market, emphasized the significance of the Solana ETF filings, stating, “After successfully listing the first US spot Bitcoin ETFs on our exchange and securing SEC approval for our rule filings to list spot Ether ETFs, we are now addressing the increasing investor interest in Solana – the third most actively traded cryptocurrency after Bitcoin and Ether.”
The SEC’s decision timeline for these ETF applications opens a 240-day window, during which the regulatory body will review the proposals. This has led to optimism among investors that a favorable outcome could drive further gains for SOL.
Bloomberg’s Senior ETF Analyst, Eric Balchunas, has highlighted that the outcome of these ETF applications could be significantly influenced by the results of the upcoming U.S. presidential elections in November 2024. However, the current anticipation has already injected a dose of optimism into the market.
According to GSR Markets, a prominent crypto market maker, the approval of spot Solana ETFs could potentially cause SOL’s price to multiply by a factor of nine, a prediction that adds to the bullish sentiment among traders.
Beyond the ETF excitement, Solana’s recent price increase is also supported by strong on-chain activity. Data from DappRadar reveals a 7.27% rise in transaction volumes across top Solana decentralized applications (DApps) over the past 24 hours. Notable increases in activity were seen in several DApps, including Raydium, Jupiter Exchange, Sol Incinerator, and Pumf.fun.
As a result, Solana’s 24-hour DApp transaction volume has surged to $103.63 million, reflecting a 76% increase. Additionally, metrics such as the number of unique active wallets (UAW) and NFT trading volume have risen by 1.71% and 27.5%, respectively, further demonstrating the network’s growing engagement.
Another critical factor is the increase in Solana’s total value locked (TVL). Data from DefiLlama shows a 4.5% rise in TVL over the last 24 hours, growing from $4.22 billion to $4.405 billion. This increase indicates a growing number of users and developers actively engaging with the Solana network.
The current optimism around Solana’s price is also informed by historical trends and future prospects. The potential approval of a Solana spot ETF and the network’s increasing on-chain activity suggest a promising outlook for the token.
Historically, significant developments in the cryptocurrency space, such as new financial products or major network upgrades, have often preceded substantial price increases. If the SEC approves the Solana ETF and the trend of rising on-chain activity continues, SOL’s price may see further gains in the near future.
As of now, Solana’s price momentum appears strong, driven by both potential regulatory developments and solid on-chain performance. Investors are watching closely to see if the excitement surrounding the spot Solana ETF will translate into long-term price appreciation.
If the ETF applications progress favorably and Solana’s network continues to grow, the token may well see further gains and possibly approach or exceed the $200 mark. However, as with all investments, potential investors should stay informed about market conditions and regulatory developments that could impact Solana’s future performance.
Pankaj is a skilled engineer with a passion for cryptocurrencies and blockchain technology. With over five years of experience in digital marketing, Pankaj is also an avid investor and trader in the crypto sphere. As a devoted fan of the Klever ecosystem, he strongly advocates for its innovative solutions and user-friendly wallet, while continuing to appreciate the Cardano project. Like my work? Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9
Get the latest Crypto & Blockchain News in your inbox.
Join Now