Solana’s SOL Surges 7% on ETF News, but Rally Fades

Solana’s native token, SOL, experienced a significant surge, rising by 7% on Monday following the announcement of the first-ever Solana exchange-traded fund (ETF) with staking capabilities, set to launch on Wednesday. This news sparked speculation among traders about the potential for institutional demand to drive SOL’s price above $200. Initially, SOL rallied to $161 but later adjusted to $157, marking a 4% gain from the previous 24 hours. The ETF, a collaboration between REX Shares and Osprey Funds, is structured as a taxable C-corporation, bypassing the typical US Securities and Exchange Commission approval process. This structure allows for a faster and smoother launch, similar to energy infrastructure partnerships, but it is less tax-efficient compared to standard cryptocurrency ETFs.

However, the initial excitement waned as traders realized that similar instruments could be launched for nearly every altcoin. Additionally, Grayscale’s Solana Trust (GSOL), which has been trading for over two years, manages only about $75 million in assets. In contrast, the Grayscale Ethereum Trust (ETHE) held $10 billion in assets under management one month before the actual launch of the spot Ethereum ETF in July 2024. This disparity suggests that institutional demand is unlikely to significantly impact SOL’s price, regardless of the staking capability.

Even if Solana gains a first-mover advantage for a few months, this could be offset by SOL staking unlocks and selling pressure from some of Solana’s decentralized applications (DApps). According to DefiLlama, approximately $585 million worth of SOL will be unlocked from staking over the next two months. Furthermore, some of Solana’s most successful DApps have regularly sold off their SOL holdings. For instance, the token launch platform Pump transferred over $404 million worth of SOL to exchanges in 2025 alone. This activity helps explain why SOL’s performance has largely mirrored that of competitors ETH and BNB over a 30-day period, despite the inherently bullish ETF news.

The SOL futures funding rate provides insight into traders’ positioning. When there is excessive demand for bullish leverage, this indicator can jump above 10% per year. Conversely, during bearish periods, funding rates turn negative as short sellers pay to keep their positions open. Despite a 12.5% gain over four days, SOL’s funding rate has failed to break above the neutral 10% threshold. The current price of $157 remains 47% below the all-time high of $295, and onchain data indicates no recovery in network activity. Even with the hype surrounding memecoins, Solana’s network revenue has dropped by over 90% since January.

The fact that Robinhood selected an Ethereum layer-2 network to launch tokenized stock trading has also diminished Solana’s appeal as the preferred solution for high-output DApps. Similarly, Coinbase partnered with Shopify on June 12 to introduce onchain payments on the Base network, which ultimately settles transactions on the Ethereum base layer. At the moment, there is little evidence that the Solana ETF launch will drive a SOL rally to $200, given increased competition and the lack of demand for currently listed Solana Trust instruments.