Bitwise: What impact will the Solana ETF listing have on the price of SOL?

Note: The first 100% Solana stake ETF will be listed on the NYSE on the evening of the 28th. What impact will this have on the SOL price? Bitwise conducted research, compiled by Golden Financial, as follows:

Key Points

• Under the simplified assumptions of today's market conditions, assuming that the current inflow and price multiplier (1.5 times) remain unchanged, a net inflow of $1 billion will correspond to an approximate 34% increase in SOL price.
• We expect that as assets become institutionalized, the relationship between capital flows and price behavior will strengthen.
• Previous spot cryptocurrency ETFs have always been “sell the news” events.

Introduction

The United States approved the spot BTC and ETH ETFs on January 11, 2024, and July 24, 2024, respectively, which is undoubtedly historic. These events mark a seismic shift in the legitimacy of cryptocurrencies as portfolio assets, accelerating the adoption by institutional investors and solidifying the status of digital assets as a mainstream component of finance.

Despite Europe's long-standing open attitude towards cryptocurrency exchange-traded products (ETP), the United States has lagged under the regulatory oversight of figures like Jay Clayton (Jay Clayton) and Gary Gensler (Gary Gensler), which can be said to be disruptive and political. Clayton is a conservative skeptic, while Gensler has applied his “expertise in cryptocurrency” to confrontational battles. After facing legal losses and reputational damage, the U.S. Securities and Exchange Commission (SEC) approved these two assets, signifying that the regulatory body has finally given the green light.

The application for the Solana ETF follows the path set by spot Bitcoin and Ethereum ETFs, using the same commodity-based trust share framework, and relies on a monitoring-sharing arrangement related to CME Solana futures.

SOL is the sixth largest cryptocurrency by market capitalization (approximately $110 billion), but its CME futures market has stronger liquidity and is larger in scale, exceeding that of its closest competitor XRP (the fifth largest by market capitalization; approximately $157 billion), with over $100 million traded daily, averaging $266 million per day in July 2025. The CME futures market for SOL should be sufficient to quell the U.S. Securities and Exchange Commission's concerns about “manipulating a large-scale unregulated market.”

Previously, the general listing standards were introduced, allowing companies that meet the standards to issue funds “with one click”. This may not necessarily drive asset development automatically, but it has indeed transformed crypto assets from “little-known currencies associated with wallets on the blockchain” into “stock codes that anyone can access through brokerage accounts”. When the fundamentals and market sentiment align with traditional finance (Trad-Fi), this will prepare the assets for an upward trend.

This article aims to interpret whether the listing of the SOL ETF will have an impact on the price of SOL.

SEC approval is a “sell the news” event

The price trends after approval indicate that although the launch of the ETF is beneficial in the long term, it may become a “news sell-off” event in the short term. The trading prices of both assets fell initially and then reversed to rise about two weeks after approval.

• BTC Approved (January 2024): BTC has risen by about 1.75 times in the 90 days prior to approval, as the market has already priced in the impact of the approval, and BTC's trading momentum is strong as it enters the second year of its 4-year cycle. This pullback is a typical case of profit-taking following a strong signal event.
• ETH Approval (July 2024): The price movement of Ethereum has been somewhat chaotic, consolidating sideways prior to approval. The impact of the ETH ETF on the market is uncertain, partly because the funds flowing into BTC ETFs at that time were still relatively low, leading to uncertainty about whether ETFs can structurally change demand.

The price performance of BTC and ETH before and after the approval of the spot ETF.

Both of these assets ultimately benefit from the approval of the ETF, but the initial reaction reflects that the market has already made a decision in advance.

History doesn't repeat itself, but it often rhymes.

If history is any guide, the approval of SOL's ETF may lead to a similar trend: a short-term decline or muted response, followed by long-term structural support. This approval has already sparked widespread discussion and expectations, so it is unlikely to come as a complete surprise, especially with one ETF already approved.

The relationship between SOL ETP flow (as a percentage of AUM) and SOL returns shows an average beta coefficient of 0.269, which means that on average, a 1% inflow into SOL ETP (relative to AUM) is associated with a +0.269% change in SOL weekly returns.

However, the R² is only about 16.5%, which means that the changes in overall returns explained by the capital flow account for less than one-fifth of the entire observation sample. In other words, while there is a directional relationship, most of the price movements of SOL are likely driven primarily by factors outside the scope of this analysis.

Most data points are closely clustered around zero traffic, with only a few extreme weeks (outliers, with traffic reaching 50% to 300%) causing the regression line to shift upward. This indicates that this relationship is primarily influenced by large ETP traffic events rather than “normal” weeks.

Our sample includes 13 SOL stocks, ranging from 1041 days of VSOL SW Equity (September 21, 2021) to 82 days of SSK US Equity (the first SOL stake ETF). Net fund flow data is summarized by weeks since the establishment of each stock.

SOL weekly return vs SOL ETP weekly flow (percentage of AUM)

Solana ETP traffic is growing, but it still remains in a secondary position

Since the fourth quarter of 2024, especially in the past few months, the inflow of funds into global Solana ETPs has surged, with current total assets under management (AUM) totaling approximately $3.9 billion. This represents a significant attraction for institutional investors, but is still relatively small compared to Bitcoin and Ethereum.

In the fourth quarter of 2024, on the eve of Trump's election victory, Solana performed exceptionally well, becoming the preferred blockchain for meme coin issuance. The meme coin issuance platform Pump.fun, defining this cycle, is built on Solana's leading DEX Raydium. During the peak participation of retail investors, Solana accounted for nearly 90% of all DEX trading volume. Meme coins occupied a significant portion of the trading volume, benefiting Solana's ecosystem immensely. Although ETP traffic contributed somewhat, it was not the dominant driving force.

Even at the current level, the explanatory power of capital inflows on the SOL price trend is stronger than ever (by 2025, the explanatory power will rise to about 20%), but retail dynamics still dominate. There are mainly two reasons:

1. SOL is still an asset primarily driven by retail investors. It has been the foundational layer of the meme coin craze, with a significant portion of its trading volume related to the token issuance platform.

2. In absolute terms, the inflow of institutional funds is relatively small. Given that the total assets under management for ETPs is approximately $3.9 billion, SOL still belongs to high beta, high-risk assets, positioned higher on the risk curve of traditional financial portfolios. Institutional investors are participating, but the scale is still not large.

cross-asset correlation matrix

In the early stages of the bear market (2022), the rolling R² soared above 40%, and the beta coefficient remained positive. This reflects a period where redemptions and price declines occurred simultaneously — the flow of funds and returns were closely linked, with the beta coefficient showing positive during the same period, as both were driven by forced selling or capitulation. In the first six months of 2022, prices fell by about 77%.

As the bear market entered 2023, prices fell again by about 77% by the end of the year, with the beta coefficient approaching zero and sometimes even turning negative, while R² dropped to very low levels. This indicates that capital inflows tend to be “sticky” or counter-trend—investors continue to enter the weak market on average even as prices keep falling. During this phase, capital inflows increase while returns decrease, leading to a negative β value. Market behavior is more influenced by external shocks (such as the FTX collapse and widespread liquidity pressures) rather than dominated by ETP capital inflows.

In contrast, the bull market of 2024-25 presents a different picture. The beta coefficient is roughly positive, and the R² value is in the range of 10%-20%. At this time, capital flows tend to chase and amplify the upward space: new funds and new allocations reinforce the upward momentum. Although capital flows are not the only driving factor for performance, during periods with a high beta coefficient and not low R² values, capital flows are closely related to prices. During this period, the beta coefficient occasionally shows negative spikes, usually associated with pullbacks or market rebalancing events, such as new funds catching up to previous gains or redemptions during short-term pullbacks.

How Net Capital Inflows Affect Prices

Under the simplified assumptions of today's market conditions, assuming that the current flow and price multiplier (1.5 times) remain unchanged, a net inflow of $1 billion into the ETF would correspond to a price increase of approximately 38%.

Please note that this sensitivity table is purely simultaneous; it does not incorporate any uncertainty (whether R² or confidence/prediction intervals) into the price impact numbers.

The sensitivity of SOL performance to ETP capital net flow.

Institutional Allocation Impact

Over the past approximately 3.5 years, ETP capital flows have had varying degrees of impact on the price movements of SOL. Most of the price fluctuations can be explained by factors outside the scope of this analysis.

However, we believe that Solana may still be dominated by retail investors, thanks to its role as the preferred meme coin launch platform and its strong cultural reputation within the industry.

Institutional allocators may have a greater impact on price movements in the future.

Conclusion

The approval of the Solana ETF by the US SEC will be another milestone for the industry, but may not necessarily drive its development in the short term. Historical experience shows that, like BTC and ETH, the approval of this ETF will also be somewhat “digested” in advance, leading to a higher risk of initial pullback.

In the long run, ETFs should be able to enhance and increase the attractiveness of the asset to institutional investors by providing low-cost, bankruptcy-remote packaging for the underlying securities. This will gradually increase institutional participation and may explain the reason why the price of SOL has become more volatile over time, while the “multiplier” (beta coefficient) will rise, thereby enhancing the bidirectional fluctuations in price.