The Solana [SOL] community has been eagerly anticipating the possibility of ETF approval, as several companies applied to the SEC. However, recent reports indicate that Solana ETFs may not be introduced this year.
Solana emerged as a natural choice following the successful launch of Bitcoin and Ethereum ETFs. Various firms, such as VanEck, Bitwise, Grayscale Investments, 21Shares, and Canary Capital, were quick to submit applications for Solana ETFs.
A recent disclosure by the U.S SEC to a couple of applicants hinted at a potential rejection of their applications. The rationale behind the anticipated refusal primarily revolves around the uncertainty surrounding Solana’s asset classification, particularly concerning whether it could be deemed a security.
How Will the Price of SOL be Affected?
In the past, the anticipation of Bitcoin and Ethereum ETFs triggered excitement in their price actions days before launch. Nevertheless, following the actual ETF launches, prices experienced a decline, indicating that ETF approvals are often associated with a “buy the rumor, sell the news” dynamic.
The rejection of ETF applications is not expected to have a significant impact on the price of SOL. However, the approval could have potentially attracted institutional liquidity in the long run, thus potentially driving SOL prices higher in the subsequent months.
SOL has demonstrated strong growth this year, notably trading comfortably above the $200 mark. Despite a recent retracement after reaching a new peak, the current price stands at $235.88.
If market sentiment remains bullish in December, SOL is likely to recover and surpass the $200 level. Moreover, a resurgence in demand could potentially push it even higher.
Conversely, a scenario of capitulation may lead to substantial selling pressure, potentially causing the price to drop as low as $157 before testing the next significant support level.
Solana’s Resilient On-Chain Performance
Although the price may have slowed down recently, Solana’s network continued to exhibit positive momentum in various crucial aspects. For instance, its Total Value Locked (TVL) recently reached an all-time high of $11.69 billion.
There has been a substantial increase in on-chain volume, hitting $5.88 billion in the last 24 hours. This surge highlights the robust network activity that Solana has been fostering.
Regarding network transactions, there has been steady growth in Q4. Daily transactions on the network initially ranged around 40 million and have now exceeded 50 million transactions.