Solana (SOL) Price Holds Above $130 as Solana ETF Launches in the U.S.

The debut follows the listing of Solana futures contracts on the Chicago Mercantile Exchange (CME) on March 17.

The American financial institution, CME Group, announced the launch of futures on the cryptocurrency Solana (SOL). These futures began trading on March 17, offering financial institutions a new avenue to invest in the seventh-largest cryptocurrency.

The debut of CME futures paves the way for the launch of a Solana ETF (exchange-traded fund) in the U.S. Indeed, later today, March 20, saw the introduction of two Solana ETFs by Volatility Shares. These products provide exposure to Solana futures, with one offering leveraged exposure at twice the returns of Solana futures movements.

The two new ETFs are the Volatility Shares Solana ETF (SOLZ) and the Volatility Shares 2X Solana ETF (SOLT). They carry a 0.95% fee for SOLZ and a 1.85% fee for SOLT.

Solana ETF: A Focus Despite Low Trading Volume

The launch of the Solana ETF comes just three days after CME began trading Solana futures. On its first day, Solana futures trading volume reached $12.3 million, which was lower than Bitcoin (BTC) at $102.7 million and Ethereum (ETH) at $31 million. Open interest for Solana futures stood at nearly $8 million, while BTC and ETH futures exceeded $20 million on their first day.

However, the low trading volume didn't prevent the launch of the Solana ETF.

Bloomberg ETF analyst Eric Balchunas compared Solana ETFs to Bitcoin ETFs BITO and BITX, stating that ETF investors often prefer direct exposure to the asset.

"We knew this day would come eventually. It's no secret that I prefer the leveraged ETFs in this case—more interesting to follow. But I'm surprised they went straight to 2x and not 3x like we saw with BTC. Still, good to see the expanding opportunities in the U.S. ETF market," Balchunas said.

Industry analysts see futures-based ETFs as a possible first step toward a spot Solana ETF, similar to how Bitcoin ETFs and Ethereum ETFs developed. The U.S. Securities and Exchange Commission (SEC) has yet to approve a spot Solana ETF.

The approval of Bitcoin spot ETFs in 2024 brought significant institutional capital into BTC, while altcoins like Solana lacked similar investment options.

However, the introduction of futures-based Solana ETFs showcases the expanding interest in regulated investment products for altcoins.

"The launch of the Volatility Shares Solana ETFs marks a significant moment in the U.S. investing landscape. As we navigate the evolving dynamics of financial markets, we're continually seeking to provide innovative solutions that cater to the evolving needs of investors. This launch aligns perfectly with the burgeoning interest in crypto investment in the U.S., offering a valuable addition to the existing suite of investable assets available to market participants," said Justin Young, CEO of Volatility Shares.

Solana ETF: Expanding Institutional Interest

The founder of Solana-based swap platform Titan, Chris Chung, also touched upon the launch of CME Solana futures, noting that it signifies the increasing maturity of Solana as an institutional asset class.

"The launch of CME Solana futures signals the evolving landscape of the crypto market. As the industry matures, we're seeing a shift in focus towards assets that offer both promise and appeal to financial institutions. Solana, in particular, has been making strides in engaging institutional interest. It seems like they are expanding beyond their earlier market role and engaging financial institutions who are looking for optimal avenues to gain exposure to the crypto space. This move towards offering futures contracts on Solana signifies the cryptocurrency's increasing integration into mainstream financial institutions and signals an exciting chapter in the evolution of the crypto market," Chung explained.

Overall, the launch of the Solana ETF highlights the ongoing changes in the U.S. financial landscape. If institutional demand for Solana ETFs surges, market participants anticipate further development of regulated investment products linked to Solana futures and Solana spot trading.