Matrixport Co-Founder Suggests Solana as Next ETF Candidate

Should spot Ethereum ETFs receive approval, Solana (SOL) could be the next contender for launching exchange-traded funds, according to Matrixport co-founder Daniel Yan.

What’s the trade, if ETH ETF really get approved in two days?

The popular trade would be “BUY ETH”. Can’t really argue with that but do note that ETH is almost +20% over the past 24 hours. In addition, Bitcoin had a -15% drawdown in the couple of weeks after the approval on… pic.twitter.com/xtDGHqbq81

— Daniel Yan (@_D_Y_A_N) May 21, 2024

The expert also noted that ETH paired with BTC rose by 12% following reports of the SEC requesting issuers to update form 19b-4 in their product applications. 

Yan believes that after the potential launch of spot Ethereum funds, a correction might follow, similar to Bitcoin, which dropped by 10% in the initial days of ETF trading. 

Another analyst, known as gumshoe, argues that the approval of instruments based on the second-largest cryptocurrency is “more optimistic for SOL than for ETH.” 

ETH ETF approval is more bullish for SOL than ETH:

— Approved? The next ETF is SOL
— Rejected? There is less reason to buy ETH, SOL is more attractive

What I don’t like is that now the market will price in the approval and if it gets delayed we will nuke pic.twitter.com/UyxzvaIZeK

— gumshoe (@0xGumshoe) May 20, 2024

“Approved [Ethereum funds]? Then SOL-ETF is next. Rejected? Then there’s less reason to buy ETH, but SOL becomes more attractive,” he added. 

The user cited a negative factor, noting that the market will now evaluate each fund approval process, and in the event of a rejection, the sector risks experiencing a “nuclear hit.”

At the time of writing, SOL is trading at $177, having gained nearly 20% over the past week. The coin’s market capitalization stands at $79.2 billion. 

Previously, Merkle Tree Capital’s Chief Investment Officer Ryan McMillin predicted Solana’s rise to $400 by November 2024, attributing it to a wave of meme coins related to the U.S. election campaign.

Daniel Chung, co-founder of the hedge fund Syncracy Capital, suggested SOL could return to $200 by the end of May. 

Earlier, CoinGecko analysts recognized the Solana network as the fastest among major blockchains. On April 6, the average daily number of transactions per second reached a record high of 1504 amid a meme token boom.