Solana’s (SOL) next stop could be $300: Here’s why

Key takeaways:

• Corporate treasury strategies accumulated 17 million SOL, bolstering institutional demand despite weak leverage demand.

• A wave of cryptocurrency ETF approvals in the US is likely, but SOL must secure inflows amid competing altcoins.

Solana’s native token, SOL (SOL), rallied above $250 on Thursday, marking its highest level in nearly eight months. SOL has outperformed the broader altcoin market by 25% over the past 30 days, driven largely by corporate adoption as a reserve strategy.

Traders now debate whether further bullish momentum is sustainable given the muted appetite for leveraged SOL long positions.

The annualized perpetual futures funding rate has hovered near 8%, reflecting low demand for leveraged buying. Periods of strong bullishness usually push the indicator above 15%, a threshold one might expect after SOL gained 37% in 30 days. More significantly, institutional accumulation appears to have reduced SOL’s risk profile from a supply-and-demand perspective.

Firms employing SOL as a reserve asset have collectively amassed more than 17 million SOL, valued at $4.3 billion, according to Strategic Solana Reserve data. Notable holdings include Forward Industries (FORD) with 6.82 million SOL, Sharps Technology (STTS) with 2.14 million SOL, and both Defi Development Corp (DFDV) and Upexi Inc. (UPXI), with close to 2 million SOL each.

The SOL reserve strategy reflects a model popularized by Michael Saylor at Strategy (MSTR), which involves issuing corporate debt and additional shares to acquire cryptocurrency. On Monday, Nasdaq-listed Helius Medical Technologies (HSDT) announced a $500 million treasury program focused on SOL.

SOL options lean positive as SEC advances crypto ETFs

To determine whether weak demand for bullish SOL exposure is confined to perpetual contracts, one must look at activity in the options market. A lack of conviction typically pushes the put-to-call premium ratio above 200%, indicating strong demand for neutral-to-bearish strategies.

The indicator has ranged between 14% and 57% over the past week, reflecting a higher premium for call (buy) options. This suggests that concerns raised by the perpetual futures market are overstated, as derivatives traders are not positioning for a downside move. Some of this optimism may be tied to expectations of multiple Solana exchange-traded funds (ETFs) launching in the US.

On Wednesday, the US Securities and Exchange Commission (SEC) introduced new regulatory standards that could accelerate spot cryptocurrency ETF approvals. Traders are particularly hopeful about an SOL ETF following the success of Ether-based products, which have amassed $24 billion in assets under management.

The SEC also approved the first multi-asset crypto exchange-traded product in the US, clearing Grayscale’s $930 million Digital Large Cap Fund (GLDC) for listing. The fund invests primarily in Bitcoin (BTC) and Ether (ETH), while also holding smaller allocations to XRP (XRP), SOL, and Cardano (ADA).

Related: Grayscale prepares to stake Ether holdings amid shifting SEC stance — Arkham

Ethereum continues to dominate institutional allocations thanks to its expansive total value locked (TVL), which currently stands at $101.6 billion. Solana ranks second with $14.6 billion, according to DefiLlama data. However, SOL distinguishes itself with a staking yield of 6.8%, significantly higher than Ether’s 2.9%. This superior return could become a decisive factor for newcomers.

With the US SEC approval almost certain, SOL’s path to $300 relies on capturing ETF inflows despite competing altcoin launches and maintaining steady corporate treasury accumulation.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.