Solana News Today: Solana ETFs Face Uphill Battle Against Ethereum's DeFi Dominance

JPMorgan analysts predict that Solana exchange-traded funds (ETFs) will attract modest inflows of approximately $1.5 billion in their first year, a fraction of the $9.6 billion estimated for Ethereum ETFs during their initial year post-approval. The bank attributes this disparity to weak on-chain activity, investor fatigue from multiple crypto ETF launches, and competition from diversified crypto index products such as the S&P Dow Jones Digital Markets 50. Despite the U.S. Securities and Exchange Commission (SEC) being widely expected to approve Solana ETFs this month, the firm cautions that demand signals remain muted.

The projection is based on early performance metrics from the REX Osprey Solana Staking ETF (SSK), which garnered $350 million in inflows after its July launch, compared to $2.3 billion for Ethereum ETFs in their first three months. JPMorgan analysts, led by Nikolaos Panigirtzoglou, noted that Solana's market perception as a secondary DeFi/smart contract platform relative to Ethereum further dampens investor enthusiasm. Additionally, declining on-chain metrics-such as falling active addresses since November 2024 and the dominance of memecoin trading-pose headwinds.

Market indicators reinforce the cautious outlook. The Grayscale Solana Trust (GSOL) premium to net asset value (NAV) has collapsed from over 750% last year to near zero, mirroring trends observed in Bitcoin and Ethereum ETFs prior to their conversions. Weak demand for Chicago Mercantile Exchange (CME) Solana futures and corporate treasury products offering yield also suggest limited appetite for spot ETFs. The SEC's recent adoption of generic listing standards for digital asset ETFs has accelerated the approval process, with deadlines for Solana ETF filings expiring on October 10.

While the bank acknowledges the likelihood of approval due to the existence of an established CME futures contract and the prior approval of the REX Osprey ETF, it highlights structural challenges. Solana's smaller decentralized finance (DeFi) total value locked (TVL) relative to Ethereum-approximately one-seventh-further supports the $1.5 billion inflow estimate. However, the analysts warned that actual inflows could fall short due to waning investor interest and the proliferation of alternative crypto products.

The forecast contrasts with earlier projections from a JPMorgan team led by Kenneth B. Worthington, who estimated potential inflows of $2.7 billion to $5.2 billion within six to twelve months if approved. Market participants, including Polymarket bettors, remain optimistic, with over 99% odds assigned to a 2025 Solana ETF approval. Nevertheless, the broader crypto market has reacted cautiously, with Solana's price dropping 5% following the report's release.

The anticipated approval of Solana ETFs marks a pivotal moment for institutional adoption of altcoins, following the success of Bitcoin and Ethereum ETFs. However, JPMorgan's analysis underscores the challenges Solana faces in competing with Ethereum's entrenched position in the DeFi ecosystem and the need for stronger network fundamentals to attract sustained investment.

Source: [1] Coindesk (https://www.coindesk.com/markets/2025/10/09/jpmorgan-sees-modest-inflows-for-solana-etfs-despite-likely-sec-approval) [2] The Block (https://www.theblock.co/post/374019/jpmorgan-solana-etfs-low-inflows-1-5-billion-first-year) [3] Fxstreet (https://www.fxstreet.com/cryptocurrencies/news/solana-drops-5-as-jpmorgan-predicts-underwhelming-sol-etf-performance-202510091938) [4] The CCPress (https://theccpress.com/jpmorgan-solana-etf-inflows/) [5] Yahoo Finance (https://finance.yahoo.com/news/why-jpmorgan-thinks-solana-etfs-214018723.html) [6] Cryptopolitan (https://www.cryptopolitan.com/jpmorgan-says-solana-etfs-are-likely-to-see-low-inflows/) [7] Cryptotale (https://cryptotale.org/jpmorgan-predicts-modest-demand-for-solana-etfs-this-year/)