Solana News Today: SEC Approval Likely for Solana ETFs, But JPMorgan Flags Weak Infrastructure and Competition

JPMorgan has projected that Solana exchange-traded funds (ETFs) will attract approximately $1.5 billion in first-year inflows if approved by the U.S. Securities and Exchange Commission (SEC), a figure significantly lower than the $10.5 billion expected for Ethereum ETFs in their initial year. The bank's analysis, published on October 9, 2025, attributes this disparity to weak on-chain activity, investor fatigue from multiple crypto product launches, and competition from diversified crypto index funds such as those tied to the S&P Dow Jones Indices Digital Markets 50. Despite the anticipated SEC approval-widely expected as early as mid-October-JPMorgan analysts led by Nikolaos Panigirtzoglou emphasized that Solana's market infrastructure remains underdeveloped compared to Ethereum's, which has already demonstrated institutional traction through its ETFs.

The report highlights several structural challenges for Solana ETFs. First, the Grayscale Solana Trust (GSOL) has seen its premium to net asset value (NAV) collapse from 750% in 2024 to near zero, a trend mirrored by Bitcoin and Ethereum ahead of their ETF launches. This suggests that market demand for Solana may already be priced in, limiting upside potential. Additionally, weak positioning in Chicago Mercantile Exchange (CME) Solana futures indicates limited speculative interest from institutional investors. JPMorgan also noted that corporate treasuries could divert demand away from spot ETFs, further constraining inflows.

The SEC's upcoming decision on 16 spot crypto ETF applications, including Solana, is pivotal. While the approval of a Solana ETF is deemed likely due to existing CME futures and the July launch of the first Solana ETF by REX Osprey, the bank warned that regulatory uncertainty and evolving policy frameworks could delay or dilute investor enthusiasm. The SEC's adoption of "generic listing standards" in September 2025, which streamline approvals for spot commodity ETPs beyond Bitcoin and Ethereum, has already expanded the pipeline for new crypto products. However, JPMorgan cautioned that these standards may not fully address risks associated with Solana's regulatory classification, which the U.S. Securities and Exchange Commission has previously debated as a potential security.

Despite these headwinds, the market is pricing in optimism. Solana's price has surged in anticipation of ETF approval, with technical indicators suggesting short-term bullish momentum. Institutional demand is also growing, as evidenced by Helius' $6 billion plan to purchase Solana and Bitwise's aggressive fee cuts in its proposed Solana Staking ETF. Bitwise reduced its annual management fee to 0.20%, triggering a "fee war" among ETF issuers and positioning itself as a front-runner. Analysts like Eric Balchunas noted that low fees historically attract inflows, though the competitive landscape could erode margins for other providers.

The broader crypto market's performance will also influence Solana ETF success. While Ethereum ETFs have shown cyclical inflows, Bitcoin's dominance and Ethereum's institutional adoption provide a benchmark for Solana to overcome. JPMorgan emphasized that sustained on-chain activity-such as stablecoin settlements and developer growth-is critical for Solana to justify its valuation. However, risks persist, including network reliability concerns (e.g., a February 2024 outage) and regulatory scrutiny of its ecosystem.

In conclusion, JPMorgan's analysis underscores a cautious outlook for Solana ETFs. While regulatory approval is probable, the bank anticipates modest inflows compared to Ethereum's established ecosystem. The outcome will hinge on Solana's ability to demonstrate robust network usage, secure institutional backing, and navigate evolving regulatory frameworks.

Source: [1] JPMorgan Sees Modest Inflows for Solana ETFs Despite Likely SEC Approval (https://www.coindesk.com/markets/2025/10/09/jpmorgan-sees-modest-inflows-for-solana-etfs-despite-likely-sec-approval)