Grayscale Solana Trust Trading At A Mega 650% Premium: What Happened?

Solana is in the red now, but the coin is one of the best players. In the last year of trading, SOL, the native currency of the Solana ecosystem, increased more than 15X, rapidly increasing the crypto rank to the fifth, replacing XRP, Cardano, and even top meme coins such as – Dogecoin.

GSOL Trading with 650% Premium.

There may be more for SOL in the next few weeks. Data shows that Grayscale Solana Trust (GSOL) is trading at a 650% Net Asset Value (NAV) premium.

According to Jamie Coutts, Chief Crypto Analyst at Real Vision, the spike at a NAV premium follows a wave of Solana exchange-traded funds (ETFs) in the United States and Canada.

To understand what is happening, GSOL NAV generally represents the value of all SOL owned by the trust, divided by the number of outstanding GSOL shares. If If GSOL is trading above or below NAV, it will be selling at a discount or a large premium.

If GSOL trades above NAV, it is available at a premium, which means people are willing to pay more for the underlying asset, in this case, SOL.

GSOL is now available for a fee in part due to limited availability. Only a few stocks are listed on the exchange, unlike the free trading SOL available on many crypto exchanges such as Binance or Coinbase.

Therefore, institutions, expecting prices to increase in the coming months, may have to compete with others to gain exposure to SOL through GSOL, increasing premiums.

Eyes On Spot Solana ETF Applications in the US and Canada

There is a lot of anticipation that Solana may move to Bitcoin and Ethereum in the coming months, extending the gains to Q1 2024. The preview follows the decision of VanEck and 21Shares to file for Solana exchange-traded funds (ETFs) with the United States Securities and Exchange Commission (SEC) at the end of June.

In their submission, VanEck, through its Head of Digital Asset Research, Matthew Sigel, said their product will aim to take advantage of Solana’s system of geographic distribution, assistance, and economic success. The official also added that SOL qualifies as an asset similar to Bitcoin.

Even with this application, the chances of the Solana ETF being approved by a regulatory agency remain slim. Unlike Bitcoin and Ethereum, whose futures products are available on the CME, SOL is not listed as a mortgage. At the same time, the United States SEC cited SOL as one of many unregistered securities when suing Binance and Coinbase.

Featured image from Canva, chart from TradingView