JPMorgan says Solana ETFs will struggle, forecasting under $1.5B in first-year inflows

JPMorgan analysts, led by Nikolaos Panigirtzoglou, have burst the bubble of the highly anticipated Spot Solana ETFs. According to them, the ETFs will attract far lower inflows than spot Bitcoin or Ethereum ETFs.

JP Morgan predicts that Solana ETFs will see about $1.5 billion in first-year inflows. That estimate is based on early flows into the REX Osprey Solana ETF, which has attracted nearly $350 million since launch. It was approved and launched in July, registered under the Investment Company Act of 1940, unlike other spot ETF filings, which fall under the Securities Act of 1933 and the Securities Exchange Act of 1934.

JPMORGAN SAYS SOLANA ETFS COULD BRING IN $1.5B IN THE FIRST YEAR!

SEC LIKELY TO APPROVE THIS WEEK! pic.twitter.com/qrl53OKY6I

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“A similar ratio emerges if one looks at the relative size of Solana’s DeFi TVL to that of Ethereum,” the analysts wrote. “Applying this 1/7th ratio to Ethereum’s first year net inflows of $9.6 billion suggests that Solana ETFs could potentially see around $1.5 billion of net inflows during their first year.”

Solana ETFs to see less than $1.5 billion net inflows 

The analysts warned that the figure could be lower. They cited weaker investor perception of Solana compared to Ethereum as the main DeFi/smart contract crypto, declining on-chain activity, such as falling active addresses since November 2024, and the dominance of memecoin trading on the Solana network. 

They also pointed to investor fatigue from multiple launches and competition from diversified crypto index products such as those tied to the S&P Dow Jones Indices Digital Markets 50. 

JPMorgan also noted weak demand signs, as evidenced by the pricing of Solana futures on the Chicago Mercantile Exchange (CME), as well as demand for corporate funds, which could also lead it away from spot ETFs.

JPMorgan said that prices are already highlighting the expectation. The premium to net asset value (NAV) on the Grayscale Solana Trust (GSOL) has collapsed from around 750% last year to nearly zero, echoing the trends of Bitcoin and Ether ahead of ETF launches. The narrowing mirrors the pattern seen in Grayscale’s Bitcoin and Ethereum trusts before their conversions into spot ETFs, they said.

However, this forecast contrasts with earlier projections from another JPMorgan analyst team led by Kenneth B. Worthington. He estimated earlier this year that Solana ETFs could draw between $2.7 billion and $5.2 billion in net flows within six to 12 months if approved.

Solana ETFs approval expected on Friday

The US Securities and Exchange Commission (SEC) is expected to decide on roughly sixteen spot crypto ETF applications, including Solana, this month.

The SEC recently simplified the process by introducing generic listing standards, removing the need for token-specific filings. This change has led to a surge in new crypto ETF proposals. The final deadline for spot Solana ETFs is approaching, and approval is widely anticipated.

“The strong likelihood of approval for Solana spot ETFs is reinforced by the fact that there is an already established futures contract at CME,” JPMorgan analysts said. 

Polymarket bettors are also very optimistic, placing the odds of a spot Solana ETF in 2025 at over 99%. Additionally, Bloomberg’s senior ETF analysts estimate a 100% approval probability, citing regulatory clarity and the change in leadership at the SEC. 

The agency is expected to decide on nine spot Solana ETF applications, with deadlines for filings from VanEck, Canary, Fidelity, Grayscale and Franklin Templeton approaching on Friday. Applications by Bitwise and 21Shares are expected to undergo final reviews by October 16. 

Meanwhile, the price of Sol has declined by roughly 1% over the last 24 hours, now trading at $219.68. The coin has also tanked by 2.69% over the last 7 days. 

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