Solana set for growth driven by US ETF approval and retail interest

Analysts predict that Solana (CRYPTO:SOL) may outperform Bitcoin (CRYPTO:BTC) and Ether (CRYPTO:ETH) in 2025, fueled by the anticipated approval of a US-based spot Solana exchange-traded fund (ETF) and increasing retail investor interest.

As of January 9, Solana's price fell below the $200 mark, experiencing a more than 7% decline over the week.

Despite this correction, Nicolai Søndergaard, a research analyst at Nansen, believes Solana is poised for significant financial returns in the coming year.

He noted that Solana's appeal lies in its perceived affordability compared to Bitcoin and Ether, making it attractive to new retail investors.

“[Solana’s appeal] is the function of expected profits. It’s that Solana seems cheaper. If you’re looking at a unit, you just think this is cheaper to buy,” Søndergaard stated.

However, he cautioned that many new investors mistakenly equate a lower per-unit price with greater value potential, overlooking the importance of market capitalisation.

At the time of reporting, Solana's market capitalisation stood at $92 billion, significantly smaller than Ether's $397 billion and Bitcoin's $1.8 trillion.

With expectations building around the first US-based spot Solana ETF, analysts foresee Solana's price potentially exceeding $400 based on historical trends and market patterns.

The approval of these ETFs is anticipated by the end of January 2025, shortly after President-elect Donald Trump's inauguration.

Five companies are currently seeking approval for a spot Solana ETF, including major players like Grayscale and VanEck.

A successful ETF launch could provide traditional investors with easier access to Solana without requiring accounts on centralised exchanges.

“The question is if it’s going to take a lot of iterations before it goes through,” Søndergaard emphasised that while approval seems likely in 2025, the timeline remains uncertain.

Brazil has already set a precedent by approving its first Solana ETF in August 2024, which could influence other jurisdictions.

As anticipation grows for the potential ETF and with increasing retail investor engagement, Solana appears well-positioned for growth in 2025.

At the time of reporting, the Solana (SOL) price was $189.04.