Solana (SOL) is currently in a loss state, but remains one of the best-performing cryptocurrencies.
In the past year, SOL has grown over 15 times, climbing to the fifth place in the cryptocurrency rankings, surpassing XRP, Cardano, and popular meme coins like Dogecoin.
Despite the recent decline, prospects for Solana look promising. Grayscale Solana Trust (GSOL) is trading at a 650% premium to the net asset value (NAV). This premium indicates increased investor interest and limited availability of GSOL shares.
According to Jamie Coutts, Chief Crypto Analyst at Real Vision, the surge in NAV premiums follows the wave of Solana exchange-traded funds (ETFs) in the US and Canada.
Net asset value represents the total value of all SOL shares held by the trust, divided by the number of GSOL shares in circulation. When GSOL trades at a premium, it means investors are willing to pay more than NAV for the underlying asset – Solana. This premium is partly due to the limited supply of GSOL shares, which trade less actively compared to SOL on major exchanges like Binance or Coinbase.
Institutions expecting price growth in the coming months may be the driving force behind this premium as they seek exposure to SOL through GSOL.
There is a serious expectation that Solana may outperform Bitcoin and Ethereum in the coming months, maintaining its profits from the first quarter of 2024. This optimism is fueled by recent filings for Solana spot exchange-traded funds (ETFs) by VanEck and 21Shares with the US Securities and Exchange Commission (SEC).
Matthew Sigel, Head of Digital Asset Research at VanEck, highlights the decentralization, utility, and economic viability of Solana, stating that SOL could qualify as a commodity similar to Bitcoin. However, approval of a spot Solana ETF by the SEC remains uncertain. Unlike Bitcoin and Ethereum, which have futures products listed on the Chicago Mercantile Exchange (CME), SOL does not have such listings. Additionally, the SEC has already identified Solana as an unregistered securities exchange in its lawsuits against Binance and Coinbase.
Although approval of a spot Solana ETF by the SEC remains uncertain, the expectation of such development continues to stimulate interest in SOL. Investors closely monitor these events as they can have a significant impact on the altcoin’s future performance.