Solana Surges 18% Amid Increased Trading Activity and ETF Speculation

Solana Surges 18% Amid Increased Trading Activity and ETF Speculation

Solana’s recent outperformance can be attributed to increased transactional activity and high expectations for a potential exchange-traded fund (ETF) product, according to several market analysts cited by CoinDesk.

Over the past week, Solana’s SOL tokens have surged more than 18%, surpassing the performance of major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). Early Monday, SOL was trading above $180, marking a new three-month high.

Market experts pointed to the growth in trading activity on Solana-based applications as a key factor in this rise, which has bolstered the network’s fundamentals.

“The Solana ecosystem is demonstrating significant growth, as evidenced by increased decentralized exchange (DEX) activity, a rise in daily active users, and higher fee accrual to the network,” stated Pat Doyle, a blockchain researcher at Amberdata. “These strong fundamentals, combined with positive market sentiment, are propelling SOL forward.”

Data from DefiLlama shows that the total value locked (TVL) in Solana’s tokens has increased by over 25% in the past month, reaching $5.28 billion, a level not seen since April 2022. The network has consistently earned at least $1.5 million daily since June and has recorded over $2 billion in on-chain trading volumes each day for the past week.

Solana’s appeal to traders lies in its fast settlement speeds and low transaction fees, which have fueled several meme coin trading frenzies over the past year.

In contrast, Ethereum, which is the world’s largest blockchain with a TVL of $60 billion, has seen smaller trading volumes at $1.7 billion but higher fees of $3 million due to its higher user costs.

Rennick Palley, founding partner at crypto venture fund Stratos, noted that easing regulatory policies are also enhancing SOL’s attractiveness to professional investors.

“The recent surge is due to overall market sentiment improving and the increasing likelihood that Solana and its ecosystem tokens won’t be classified as securities by the Trump administration,” he said, referencing former U.S. President Donald Trump’s apparent crypto-friendliness in pre-election speeches.

“The upcoming Ethereum ETF launch is also a factor – SOL is positioned to be the next token with an ETF. Given its relatively small market size and strong price performance, this would be extremely bullish,” Palley added.

In early July, Cboe submitted 19b-4 filings with the Securities and Exchange Commission (SEC) to list VanEck’s and 21Shares’ proposed spot Solana ETFs, which were initially filed in late June.

As of Monday morning in Europe, SOL is trading at nearly $180, reflecting a 3.5% gain over the past 24 hours and outperforming the CoinDesk 20’s broad-based 1.3% rise.