Solana News Today: Solana ETFs Face Approval, Not Adoption, as Market Dynamics Dampen Hype

JPMorgan analysts have projected that Solana (SOL) spot exchange-traded funds (ETFs) will likely gain regulatory approval in the near term but will attract significantly lower inflows compared to Bitcoin and Ethereum ETFs. The bank estimates Solana ETFs could see net inflows of approximately $1.5 billion in their first year, roughly one-seventh of Ethereum ETFs' estimated $9.6 billion in initial inflows. This projection, outlined in a report led by managing director Nikolaos Panigirtzoglou, highlights structural and market dynamics that could limit Solana's appeal to institutional and retail investors.

The U.S. Securities and Exchange Commission (SEC) is expected to rule on Solana ETF applications this month, with final deadlines approaching for filings from major asset managers like VanEck, Fidelity, and Grayscale. JPMorgan cited the existing CME Solana futures contract and the recent approval of the REX Osprey Solana ETF as factors bolstering the likelihood of approval. The REX Osprey product, launched in July and registered under the Investment Company Act of 1940, has attracted $350 million in assets, a benchmark the analysts used to model inflow expectations. Applying a 1/7th ratio to Ethereum's first-year inflows, they arrived at the $1.5 billion estimate.

However, the analysts warned that actual inflows could fall short of this projection. Key challenges include declining on-chain activity on Solana, such as falling active addresses since November 2024, and the dominance of memecoin trading on the network. Additionally, investor fatigue from a surge of crypto ETF launches and growing competition from diversified crypto index funds, such as the S&P Dow Jones Indices Digital Markets 50, could further dampen demand. The Grayscale Solana Trust (GSOL) premium to net asset value has also normalized, dropping from over 750% last year to near zero, a trend the analysts linked to reduced speculative fervor ahead of ETF launches.

JPMorgan's outlook contrasts with earlier projections from another internal team led by Kenneth B. Worthington, which had forecasted $2.7 billion to $5.2 billion in inflows within six to 12 months if approved. The discrepancy underscores internal debate over Solana's institutional adoption potential. The bank also noted weak demand signals in CME Solana futures positioning and muted interest in corporate treasury products offering yield, which could divert capital away from spot ETFs.

Market reactions have already reflected these dynamics. Solana's price dropped 5% following the report's release, with analysts attributing the decline to reduced optimism about ETF-driven inflows. Polymarket traders, however, remain bullish, pricing the probability of a Solana ETF approval at over 99%. Bloomberg's senior ETF analysts also cited a 100% approval probability, emphasizing regulatory clarity and leadership changes at the SEC. Despite these favorable conditions, JPMorgan's analysis suggests Solana ETFs will remain a niche product compared to their Bitcoin and Ethereum counterparts.

The SEC's recent introduction of generic listing standards for digital asset ETFs has accelerated the approval process, with 16 applications pending, including those for Solana and XRP. While this streamlining has spurred a wave of new proposals, JPMorgan cautioned that Solana's market fundamentals-such as weaker institutional perception as a DeFi/smart contract platform and lower network activity-will constrain its appeal. The firm's report concludes that Solana ETFs represent a "milestone" in crypto's integration into mainstream finance but will not replicate the explosive inflows seen with Bitcoin and Ethereum.

Source: [1] The Block (https://www.theblock.co/post/374019/jpmorgan-solana-etfs-low-inflows-1-5-billion-first-year)

[2] FXStreet (https://www.fxstreet.com/cryptocurrencies/news/solana-drops-5-as-jpmorgan-predicts-underwhelming-sol-etf-performance-202510091938)

[3] CryptoPolitan (https://www.cryptopolitan.com/jpmorgan-says-solana-etfs-are-likely-to-see-low-inflows/)

[4] Coindesk (https://www.coindesk.com/markets/2025/10/09/jpmorgan-sees-modest-inflows-for-solana-etfs-despite-likely-sec-approval)