Solana (SOL) recently surged to $161 — a 7% increase — following news of the first staking-enabled exchange-traded fund (ETF) set to launch in the coming week. While the announcement sparked optimism among traders, questions remain about whether this momentum can translate into long-term price growth or if it’s merely short-lived speculation.
After an initial spike, SOL pulled back to $154, still representing a solid 4% gain over the previous 24 hours. The driving force behind this move is the REX-Osprey SOL + Staking ETF, a joint initiative between REX Shares and Osprey Funds. Unlike traditional crypto ETFs in the U.S., this product uses a C-corporation structure to bypass lengthy SEC approval processes, enabling faster market entry.
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This innovative structure allows quicker deployment — a strategy often used in energy infrastructure projects — but comes with tax trade-offs. Because the fund operates as a taxable entity, staking rewards are taxed at both the corporate and investor levels, making it less tax-efficient than standard spot ETFs for Bitcoin or Ethereum.
Institutional Demand: Real Impact or Overhyped?
While the ETF news generated excitement, market reactions suggest tempered expectations. Traders quickly realized that similar structures could be replicated for nearly any altcoin, diluting the uniqueness of the Solana offering. More importantly, existing institutional vehicles like Grayscale’s Solana Trust (GSOL) have struggled to attract significant assets.
GSOL has been operational for over two years but manages only around $75 million in assets. In stark contrast, Grayscale’s Ethereum Trust (ETHE) held nearly $10 billion in assets just one month before the official Ethereum ETF launch in July 2024. This disparity highlights a critical point: despite Solana’s technical advantages and staking capabilities, institutional appetite remains weak compared to Ethereum and even Binance Smart Chain.
Without strong institutional backing, it’s unlikely that the new ETF alone will propel SOL toward the coveted $200 mark.
Challenges Ahead: Staking Unlocks, DApp Selling Pressure, and Network Activity
Even if Solana gains early-mover advantage in the staking ETF race, several headwinds could limit price appreciation:
- Staking unlocks: Over the next two months, approximately $585 million worth of staked SOL is scheduled to be released, according to DefiLlama. This influx of supply could exert downward pressure on price if demand doesn’t keep pace.
- DApp-related selling: Some of Solana’s most successful decentralized applications regularly offload their SOL holdings. For instance, token launch platform Pump Fun transferred over $404 million in SOL to exchanges in 2025 alone, as reported by Onchain Lens. Such activity contributes to persistent sell-side pressure.
These factors help explain why SOL’s performance has largely mirrored that of ETH and BNB over the past 30 days — despite favorable ETF developments. Without a surge in onchain activity or user adoption, price gains may remain capped.
Onchain Data Reveals Weak Network Fundamentals
While price movements grab headlines, onchain metrics tell a more sobering story. Funding rates for Solana futures — a gauge of trader sentiment and leverage — have remained below the critical 10% annual threshold, even after a recent 12.5% rise over four days.
Funding rates above 10% typically signal excessive bullish leverage, often preceding sharp corrections. The fact that SOL hasn’t reached this level suggests that traders aren’t fully convinced of a sustained breakout.
Moreover, Solana’s network revenue has plummeted by over 90% since January. This decline persists despite growing interest in memecoins built on the Solana blockchain, indicating that speculative activity isn’t translating into real economic value for the network.
Competitive Pressures Mount
Solana’s position as a top-tier smart contract platform is also under threat from emerging competitors:
- Robinhood’s choice of an Ethereum Layer-2 for its tokenized stock trading product signals a preference for Ethereum’s ecosystem over Solana for high-throughput applications.
- Coinbase’s partnership with Shopify on June 12 to enable onchain payments via the Base network further strengthens Ethereum’s Layer-2 momentum. Base settles transactions on Ethereum’s mainnet, reinforcing its scalability and security advantages.
These developments reduce Solana’s appeal as the go-to platform for institutional-grade decentralized applications.
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FAQ: Your Questions About Solana and the New ETF
Q: What is a staking-enabled ETF?
A: A staking-enabled ETF allows investors to gain exposure to a cryptocurrency while also earning rewards from staking — all within a regulated financial product. However, tax inefficiencies may reduce net returns compared to direct staking.
Q: Why hasn’t Grayscale’s Solana Trust attracted more assets?
A: Despite being available for over two years, GSOL has seen limited demand due to weaker institutional interest in Solana compared to Bitcoin or Ethereum, as well as competition from more established crypto investment vehicles.
Q: Could SOL reach $200 in 2025?
A: While possible, it would require stronger institutional inflows, sustained network activity growth, and reduced selling pressure from unlocks and DApps. Current data does not strongly support such a rally.
Q: How do staking unlocks affect SOL’s price?
A: Scheduled unlocks increase circulating supply. If demand doesn’t rise accordingly, increased sell pressure can lead to price declines or stagnation.
Q: Is Solana still competitive with Ethereum and BNB?
A: Solana remains technically robust with high throughput and low fees, but faces growing competition from Ethereum Layer-2 solutions and Binance’s expanding ecosystem. Its ability to attract developer talent and real-world use cases will determine long-term viability.
Q: What would drive the next major surge in SOL price?
A: A combination of successful ETF adoption, increased onchain revenue, reduced token unlocks, and breakthrough applications could reignite bullish momentum.
Final Outlook: Cautious Optimism Amid Structural Headwinds
The launch of a staking-enabled ETF is undoubtedly a milestone for Solana. It signals growing financial innovation and opens new avenues for institutional participation. However, structural challenges — including weak network fundamentals, upcoming token unlocks, DApp selling pressure, and intense competition — suggest that the recent rally may not be sustainable.
For SOL to break past $200 and reclaim its all-time high near $295, it needs more than just product launches. It needs a resurgence in developer activity, stronger revenue generation, and deeper institutional commitment.
Until then, traders should approach the current price action with caution — recognizing that news-driven spikes don’t always reflect underlying strength.
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