Source: TradingView, CNBC, Bloomberg, Messari
Solana is Likely to Follow in ETH’s Footsteps
It’s no secret that I believe Layer-1 protocols are the least interesting part of the digital assets investing universe. The
valuations make no sense, the premise of the
fat protocol thesis is nonsense, and we can hardly call any protocol a “success” if 99% of the world’s assets (stocks, bonds, and real estate) are yet to be moved on-chain.
That said, traders are still going to trade, and it’s hard to argue with that trade right now. And SOL might be the most obvious long right now. Now, anytime anything becomes a consensus, it’s typically wrong. Just writing that anything is “obvious” makes me second-guess that opinion. But SOL does seem poised to follow in ETH’s footsteps.
You may recall that ETH was left for dead as an investment 6 months ago. It had underperformed BTC and SOL for most of the past 2 years, and the narrative was that ETH can’t scale, and ETH L2s were parasitic to ETH’s value capture. The chart of ETH vs BTC was basically straight down from the 2021 highs, up until March 2025.
Source: TradingView ETH/BTC Ratio through March 2025
But when you extend that chart over the past 6 months, it shows quite a remarkable turnaround.
Source: TravingView ETH/BTC Ratio since March 2025
And we know exactly what turned this around. First, Circle (CRCL) IPO’d, and the narrative that Ethereum is the “stablecoin chain” emerged. And for good reason. Stablecoin AUM on Ethereum represents over half of all stablecoins on-chain.
Second, on the heels of this narrative, the ETH ETFs began hoovering assets. After nearly no growth for the first year of ETH ETFs existence, Ethereum ETFs have attracted an estimated $11.68 billion in net inflows in the past five months.
Lastly, the recent Digital Asset Treasury (DAT) craze has led to another source of demand for ETH, with over $10 billion in ETH accumulated by these vehicles in the past three months alone. DATs now own over 3% of the outstanding supply of ETH.
Source: TheBlock
With this backdrop, it’s not surprising that ETH has risen over +190% since the April 8th lows (versus +42% for BTC and +85% for SOL over this same time period).
So why does this make SOL the most obvious long right now? Well, aside from just a relative value catch-up, SOL appears poised to repeat the exact same playbook that ETH just executed in the coming months.
The first Solana ETF in the United States, the REX-Osprey SOL and Staking ETF, went live on July 2, 2025, on the Cboe BZX Exchange. This ETF, managed by REX Shares and Osprey Funds, tracks the price of Solana and offers staking rewards with a variable monthly dividend, currently at a rate of 7.3%.
Several other asset managers, including VanEck, 21Shares, Bitwise, Grayscale, Franklin Templeton, Fidelity, CoinShares, and Invesco,
have filed applications for spot Solana ETFs with the SEC. While these applications are under review, the SEC has until October 10, 2025, to approve or deny them. However, some sources suggest approvals could come earlier due to regulatory pressure and the precedent set by the REX-Osprey ETF. Polymarket and Bloomberg analysts estimate a high likelihood of approval in 2025, with odds closing in on 100%. If approved, additional spot Solana ETFs could launch by late 2025.
Source: Polymarket
Further, the DAT train for SOL is picking up where ETH left off. While SBET and BMNR seem to be in a 2-horse race as the leading ETH DAT, there are currently 3 DATs in the market for SOL, all of which are trying to raise PIPEs in September, with proceeds to be used to buy SOL immediately. According to various news sources, and summarized by ChatGPT:
- Sharps Technology (STSS) – A former medical device firm, now pivoting toward crypto. Raised $400M (potentially $1B with warrants) to build a Solana treasury. Offers from the Solana Foundation include $50M in discounted SOL. Leadership includes Solana Web3 veterans Alice Zhang and strategic advisor James Zhang.  
- Pantera Capital – Looking to raise up to $1.25B via a two-part structure: $500M equity and $750M in warrants. Aims to convert a Nasdaq-listed entity into “Solana Co.” to hold SOL.  
- Galaxy / Multicoin / Jump Crypto – Working jointly to raise $1B, with Cantor Fitzgerald as financial advisor, backed by Solana Foundation endorsement. Targeting an early September close.   
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In total, there is potentially $2.65 billion flowing into Solana treasuries over the next month, if these deals get funded and closed.
Valuations aside, the market cap of SOL is currently less than 20% of ETH. If the price of ETH rose almost 200% on roughly $20 billion of new demand, what do you think happens to SOL on $2.5 billion or more of new demand?
