Grayscale expects $5 billion inflow for Solana.

In recent times, Solana (SOL) has captured the attention of investors, and Grayscale's research chief, Zach Pandl, stated that newly issued Solana spot exchange-traded funds (ETFs) could attract at least 5% of the supply, resulting in over $5 billion in inflows within 1-2 years.

While demand for Solana ETP/ETF products has increased in the U.S. this week, Zach Pandl compared SOL ETFs to the performance of Bitcoin (BTC) and Ethereum (ETH) ETFs over the past year. Pandl predicted that at least 5% of the underlying SOL supply would remain within these structures. At current prices, this percentage signifies the transfer of approximately $5 billion worth of assets into the ETFs.

Bitwise BSOL was the first to start trading, and this product recorded an inflow of $129 million in the first two days, according to Bloomberg data. Grayscale GSOL attracted $4 million on its first day of ETF conversion on Wednesday. Pandl noted that GSOL started as a trust account in 2021, and the conversion to an ETF has "eliminated the discount/premium," allowing the product to trade at par with its underlying assets.

Additionally, it appears that new token ETPs like Hedera and Litecoin are on approval paths in the market, which could increase competition. Solana ETFs can offer approximately 5.7% annual returns due to staking advantages. GSOL will pass on 77% of the staking rewards to investors. This percentage may change over time. It should be noted that Bitcoin uses a mining model and does not allow for staking, while some Ethereum ETFs do offer staking.

Pandl expressed that a significant number of new token funds may enter the market, though many institutional investors may prefer diversified crypto ETPs. On the other hand, large financial institutions like Charles Schwab have cautioned about the SEC's "distant" stance on the crypto market and the low regulatory risk. Therefore, the success of Solana ETFs will depend on the rate of technological adoption driven by the increase in stablecoin and tokenization usage.