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Traders are fretting over the risk that Solana’s price might crash as experts discuss the challenges that spot Solana ETFs face in terms of garnering approval in 2025.
Asset managers VanEck, 21Shares and others filed to form a spot Solana ETF earlier this year.
The US Securities and Exchange Commission’s deadline to either approve or reject the applications is March 2025.
And while the approval of spot Bitcoin and Ethereum ETFs this year has built up hopes that Solana could be next, many experts remain pessimistic.
And if that pessimism bleeds into the market, some fear it could trigger a Solana (SOL) price crash.
Solana was last changing hands around $144, around the mid-point of its multi-month $120-$190ish range.
If a negative catalyst did trigger a break below this range, the Solana price could drop swiftly back to the key $75 balance area could ensue.
Let’s explore the reasons why some experts are skeptical that spot Solana ETFs are coming in 2025.
Why Spot Solana ETF Aren’t Certain In 2025
Token Unlocks
Unlike Bitcoin (BTC) which has an immutable, pre-programmed supply schedule, and Ethereum (ETH), which frequently becomes deflationary at times of high network activity, Solana is an inflationary token.
20% of its supply remains locked, and will be released over time to VCs and investors like FTX.
Presumably, with these investors sat on a large profit, much of this supply will be unloaded onto the market.
X user Caramel highlights an upcoming 7.5 million SOL token unlock coming up in March 2025.
X user smartestmoney.eth, meanwhile, notes the supply overhang of 165,000 SOL every day.
Regulators may fear that spot Solana ETF approval will only enrich VCs at the cost of less well-informed investors.
Market Immaturity
BlackRock’s head of digital assets Robert Mitchnick cast doubt on the likelihood of further crypto ETFs at the recent Nashville Bitcoin conference.
“I don’t think we’re going to see a long list of crypto ETFs,” he told Bloomberg ETF analyst James Seyffart in discussion.
He noted that Bitcoin currently makes up about 55% of the over all crypto market cap. Ethereum, he noted, has a market share of around 18%.
“The next plausible investible asset is at… 3%. It’s just not close to being at that threshold or track record of maturity, liquidity, etc.”
At the current Solana price, its current market cap is around $67 billion, roughly 2.7% of the crypto market’s overall capitalization of $2.46 trillion.
Network Instability
Another issue that might deter regulators from approving spot Solana ETFs it the network’s history of downtime.
The Solana network experienced a major outage in February. And since its launch, its experienced outages on dozens of other occasions.
These outages normally have a negative impact on the Solana price, potentially harming investors.
A long history of near perfect up-time is surely one factor that played into US regulators’ decision to approve Bitcoin and Ethereum ETFs.
Network issues are another sign of Solana’s relative immaturity.
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