SOL Hits $161 After ETF News, Is It Just Hype?
Solana's native token, SOL, increased by 7% following the announcement of the first Solana ETF with staking capabilities, set to launch on Wednesday. Initial trading saw SOL rise to $161 before settling at $157, a 4% gain. The ETF, created by REX Shares and Osprey Funds, bypasses typical SEC approval, allowing for a quicker launch but with less tax efficiency compared to standard cryptocurrency ETFs. Despite initial optimism, traders adjusted expectations, noting that similar ETFs could emerge for various altcoins. Grayscale’s Solana Trust manages only $75 million in assets, contrasting sharply with Grayscale's Ethereum Trust, which held $10 billion before the Ethereum ETF launch. SOL faces potential price limitations from staking unlocks and selling pressure from decentralized applications, with $585 million in SOL set to be unlocked soon. Current market conditions show SOL's funding rate remains neutral, and network activity has declined significantly. Increased competition from Ethereum-based solutions further diminishes the likelihood of a significant SOL price rally.
