Is Franklin Templeton Looking at a Solana ETF Next?

Cryptocurrencies received a boost from mainstream investors after the launch of spot Bitcoin and Ethereum ETFs in 2024. This new wave of financial products has opened doors to a broader market, making digital assets more accessible to traditional investors. Following this trend, Franklin Templeton, which successfully launched ETFs for Bitcoin and Ethereum, is now setting its sights on Solana, as per a news report on Contribune. Can Solana be the next significant player in the ETF world, and what would this mean for investors? 

• Major firms like Franklin Templeton, VanEck, and 21Shares are exploring Solana ETFs.

• Solana's high throughput and low fees make it a promising candidate.

• Approval of Solana ETFs could significantly increase liquidity and investor interest.

The excitement around Solana ETFs is palpable. Last month, VanEck and 21Shares submitted their applications for Solana ETFs, following the path of Ethereum ETFs. These moves have driven GSOL shares to new heights, reflecting the growing investor confidence in Solana.

As one of the leading layer 1 blockchain networks, Solana has been gaining traction in the crypto community due to its impressive technological capabilities and rapid adoption, especially in the DeFi and memecoin sectors. Franklin Templeton has highlighted Solana's ability to handle high transaction volumes and its robust infrastructure as key factors for its consideration for an ETF.

As Franklin Templeton stated in a post on X: "Solana has shown massive adoption and continues to mature, overcoming technological growing pains."

Several indicators point to Solana's rising prominence:

1. Rapid Adoption: Solana's user base and transaction volumes have grown significantly.

2. Robust Technology: Its high throughput capability allows it to process thousands of transactions per second, making it an efficient platform.

3. Attractive Fees: Like Franklin Templeton’s  Ethereum ETF fee waiver, issuers may consider waiving management fees for the Solana ETF, making it an attractive option for investors.

Read more: 

1. What Is a Spot Solana ETF? Will It Be the Next Big Thing After Spot Ethereum ETFs?

2. Top Solana Memecoins to Watch in 2024

The introduction of a Solana ETF could be a game-changer for the cryptocurrency market. With firms like VanEck and 21Shares already in the race to launch their own Solana ETFs, investor interest is clearly on the rise.

Eric Balchunas, an analyst at Bloomberg, noted: "After the launch of ETH products, there will be flows, then likely Solana products, and so forth. The dam has burst."

This suggests that Solana ETFs could follow the path paved by Ethereum ETFs, leading to increased market liquidity and attracting new investors. The final SEC decisions on the first Solana ETF applications are expected by March 2025. If approved, this could mark a significant milestone for Solana and the broader cryptocurrency market.

Franklin Templeton’s recent initiatives underscore its confidence in Solana's potential. The company's move to explore Solana ETFs signals a belief in Solana's long-term viability and its ability to become a major player in the crypto world.

Read more: VanEck Files for First Solana ETF in the U.S.: A Potential Game Changer?

GSOL performance: Market price and NAV per share | Source: Grayscale 

The Grayscale Solana Trust (GSOL) is an investment vehicle that allows investors to gain exposure to Solana (SOL) through traditional security. This trust aims to reflect the value of Solana held by the trust, enabling investors to avoid the complexities of buying, storing, and safekeeping the cryptocurrency directly​. GSOL trades on the over-the-counter (OTC) markets and has recently seen a significant premium in its trading price due to heightened institutional interest.

The Grayscale Solana Trust (GSOL) has recently shown strong performance, reflecting the growing anticipation around Solana ETFs. Over the past 30 days, GSOL surged by 48.45%, reaching $507. This surge indicates robust institutional interest and positive market sentiment towards Solana.

Crypto analyst Nic commented: "The Grayscale GSOL trust is trading near all-time highs & at 7x the NAV. These institutional buyers are willing to gain $SOL exposure at an implied price of over $1,300."

This statement underscores the optimism among institutional investors, willing to pay premiums for SOL exposure.

SOL/USDT price chart | Source: KuCoin 

Solana's price has shown positive trends recently. Trading at $176.39, it has seen an 8.21% increase on weekly charts, with a trading volume rise of 4.24% to $3 billion in the past 24 hours. This aligns with the broader positive sentiment in the SOL ecosystem.

Future Outlook for Solana (SOL) Price 

Solana technical chart | Source: X 

Analysts are optimistic about Solana's future. Crypto analyst Ali Martinez predicts a potential 900% rise for Solana, citing a solid support level around $120 and a rebound in the weekly Relative Strength Index (RSI).

However, caution is advised. Veteran trader Peter Brandt suggests waiting for Solana to surpass its previous highs before making long-term investments.

The potential approval of Solana ETFs represents a notable development in the cryptocurrency market. Solana's strong technological foundations, increasing adoption, and growing institutional interest position it well for future growth. The upcoming SEC decisions could play a pivotal role in establishing Solana's place in the crypto ecosystem, potentially making it an attractive option for both institutional and retail investors. However, it is important to remain mindful of the inherent risks associated with cryptocurrency investments. Market volatility, regulatory changes, and technological challenges are factors that could impact Solana's performance.

Read more: Spot Ethereum ETFs Make a Splash: First-Day Trading Volume Hits $1.08 Billion