Solana Has ‘Two Ways to Win,’ Giving ‘Explosive’ Growth Potential, Bitwise Says

Solana offers investors “two ways to win,” giving it “explosive” growth potential as it expands in the stablecoin and tokenization markets, said Bitwise CIO Matt Hougan.

Hougan said in a post on X that Solana can win from the expected growth of the stablecoin and tokenization sectors, as well as from capturing a larger market share of those sectors.

He said Solana’s edge lies in its fast, user-friendly technology and expanding ecosystem, citing Western Union’s decision this week to launch its stablecoin, USDPT, on Solana as evidence of growing momentum in the network’s stablecoin infrastructure.

”I think people dramatically underestimate how much and how quickly these technologies will remake markets,” he said. ”It’s easy for me to imagine this market growing by 10x or more.”

Ethereum Leads The Market, But Solana Is Gaining Ground

Ethereum currently leads the stablecoin and tokenization infrastructure market by a comfortable margin when looking at each blockchain’s respective Total Value Locked (TVL) and stablecoin market share metrics. 

Ethereum on-chain metrics (Source: DefiLlama) 

Data from DefiLlama shows Ethereum’s TVL currently stands at around $85.116 billion, while the chain also hosts $163.667 billion worth of the stablecoin supply currently in circulation.

Meanwhile, Solana’s TVL stands at $11.386 billion and it hosts $16.945 billion of the stablecoin markets.

Hougan sees Solana as a top challenger and likes its odds “of winning a larger share” of the stablecoin and tokenization infrastructure market.

“It offers fast, user-friendly technology, backed by a great community with a ship-fast attitude,” he said. “It’s a newer asset and is playing catch-up against its peers in winning institutional mandates, but it’s gaining ground.”

First Spot SOL ETFs Trade In The US This Week

Hougan’s prediction comes after Bitwise launched the first US spot SOL ETF (exchange-traded fund) this week. 

On its first day of trading, the Bitwise Solana Staking ETF (BSOL) recorded $69.5 million inflows and $56 million in trading activity. According to Bloomberg ETF analyst Eric Balchunas, this was the highest amount of debut trading activity of any of the 850 ETFs launched this year. 

Prior to its launch, investors had put $220 million into the ETF as well. According to Balchunas, had the fund invested this seed capital on the first day it would have posted volumes of around $280 million. This would have been higher trading volumes than BlackRock’s US spot Ethereum ETF (ETHA). 

Inflows for the investment product continued in the days that followed. After its first day of trading, BSOL saw $46.5 million inflows on Oct. 29 and $36.5 million on Oct. 30, according to data from Farside Investors. 

US spot SOL ETF flows (Source: Farside Investors)

BSOL was also able to outperform the Grayscale Solana Trust (GSOL) product, which debuted a day after BSOL. 

The US spot SOL ETF market could soon become more competitive as more funds enter the space. 

According to Grayscale executive Zach Pandl, spot SOL products could see the same success that similar investment products for Bitcoin and Ethereum enjoyed. The executive believes that spot Solana ETFs could swallow up at least 5% of SOL’s total supply within the next year or two.

That would equate to more than $5 billion worth of SOL tokens at current prices. 

The recent launch of the US spot SOL ETFs has not had the desired impact on the price of Solana, which has retraced amid a broader crypto market correction in recent days. Data from CoinMarketCap shows SOL slid more than 2% in the past 24 hours to trade at $186.56 as of 7:22 a.m. EST.