Solana’s recent price recovery has encountered strong resistance at $150, with short-term attention focused on the Federal Reserve. Nevertheless, the SOL coin is still up approximately 50% from its lowest point in April.
This year, Solana has numerous catalysts, the primary one being the potential approval of a spot SOL ETF by the Securities and Exchange Commission (SEC). This article explores how high the SOL coin might reach if these ETFs accumulate about $6 billion in assets.
JP Morgan Predicts SOL ETFs to Gain $6 Billion in Inflows
The SEC is expected to approve spot Solana ETFs by companies like VanEck, Bitwise, Canary, Grayscale, and Franklin Templeton later this year. If this happens, analysts at JPMorgan believe that Solana has the momentum it needs to attract at least $6 billion in inflows in the first year.
These inflows would be substantial, given that all the spot Ethereum ETFs have had just $2.5 billion in inflows since their inception in September last year.
JPMorgan believes Solana ETFs will perform well because it is a superior chain compared to Ethereum in terms of speed and low transaction costs. It also offers a higher staking yield of about 8% compared to Ethereum’s 3%, and its ecosystem is growing faster.
If the SEC permits issuers to offer staking services, Solana ETFs could potentially attract more inflows. Holders would generate a staking return in addition to benefiting from Solana’s growth.
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An ETF approval and accompanying inflows would be bullish for the Solana price. However, the direct impact on the price is hard to quantify because, although significant, a $6 billion inflow into Solana over one year is not particularly large.
This is because Solana consistently sees over $5 billion in daily trading volume. Moreover, it has experienced over $765 million in staking inflows in the last 30 days without a dramatic surge.
Also, while a SOL ETF is positive news, investors are likely to sell upon news of approval since it may already be priced in. A good example of this is Ethereum, whose price dropped after its ETF approval.
A complex way to estimate the Solana price with $6 billion in inflows is to use Bitcoin as a benchmark. BTC ETFs have accumulated over $40 billion in inflows or 6.8% of the initial market cap in January last year. The $40B inflows led to a 213% Bitcoin surge.
In this scenario, Bitcoin’s price multiplier was 31 (213/6.8). Assuming Solana’s multiplier is about 50% of Bitcoin’s, it would be approximately 15.5.
A $6 billion inflow into Solana represents approximately 7.7% of its market cap. When multiplied by the scaled multiplier of 15.5, this predicts a 120% surge from the current price level, bringing its price to $330.
Solana Price Prediction
A technical analysis of Solana’s price can help us develop another long-term forecast. On the weekly chart, the coin has formed a cup and handle pattern and is now creating the handle section.
The cup has a depth of about 95%. Measuring the same distance from the cup’s upper side will help bring SOL to over $500 in the long term.
