Solana ‘Next In Line’ After Approval of Ether ETF: Matrixport

The recent rumors surrounding the possible approval of a Spot Ethereum ETF have not only pushed the price of Ethereum higher, but also generated significant interest in Solana as a strong follow-on candidate for ETF consideration. Amid this optimism, Daniel Yan, co-founder of Matrixport, has proposed a strategic pivot for investors, suggesting a focus on Solana (SOL) in relation to Ethereum.

Is Solana next in line?

In a after on X, Yan dissected the immediate market reactions to major ETF approvals and provided strategic analysis for possible future moves. His insights draw from the historical market behavior observed after the spot Bitcoin (BTC) ETF approval.

Following the adoption of Bitcoin ETF on January 10, BTC experienced a significant drop of -15% in the weeks following the event. This pattern of initial rise followed by a sharp pullback could provide a cautionary framework for investors eyeing Ethereum’s potential ETF approval.

Yan argues that while the intuitive response might be to invest directly in Ethereum, given its nearly 20% appreciation in the past 24 hours, a more nuanced approach could be useful. He advocates a “BUY SOL/ETH” trading strategy. This recommendation is based on three key observations:

  • Next candidate for an ETF: Yan believes that Solana could very well be the next cryptocurrency eligible for an ETF if Ethereum’s ETF receives approval. This expectation could lead to increased investor interest and potential price increase of SOL.
  • Relative market movements: Following the approval of Bitcoin’s ETF, the ETH/BTC pair saw an increase of around 12% within a week. This was likely due to the expectation that Ethereum would follow suit. Similar speculative momentum could be expected for Solana, which could boost its value against Ethereum.
  • Undisturbed trading: The current market focus is mainly on Ethereum, making it a potentially busy trade. Solana, on the other hand, offers a less saturated option, offering the potential for higher relative gains based on ETF speculation dynamics.

The broader context of Yan’s strategy includes the latest regulatory developments where the US SEC has encouraged issuers to update their 19b-4 filings, a move that has been interpreted as a significant step towards the potential approval of Ethereum spot ETFs. This has increased confidence among experts, increasing the estimated probability of approval from 25% to 75%. according to to senior Bloomberg analysts.

The optimism surrounding Ethereum’s ETF prospects has not only boosted Ethereum’s market position, but has also positively impacted other major cryptocurrencies, including Solana, which posted robust gains in response to overall market sentiment.

At the time of writing, SOL was trading at $180.08.

Solana price
SOL price regains the 0.618 Fib, 1-week chart | Source: SOLUSD on TradingView.com

Featured image from Forbes USA, chart from TradingView.com

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