3 Reasons to Buy Solana before Oct. 16

Key Points

• Regulators will decide whether to approve Solana ETFs soon.

• If they give the green light, it will be a significant unlock for the coin.

• This kind of positive catalyst only occurs once.

• 10 stocks we like better than Solana ›

It’s often a good idea to position yourself in an asset before a major catalyst that could send its price skyward. Oct. 16 could be one of those dates for Solana, (CRYPTO: SOL) because on that day, the Securities and Exchange Commission (SEC) plans to issue a final decision on whether to list several Solana exchange-traded funds (ETFs).

The setup here is familiar; spot Bitcoin and Ethereum snapped into the distribution pipes of brokerages, advisors, and retirement accounts shortly after their listing was approved, drawing sizable inflows and significantly bolstering their legitimacy as assets. So, let’s examine three reasons that investors may want to buy Solana before the SEC weighs in.

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1. An approval would open retirement channels instantly

One of the most powerful engines in American investing is retirement savings.

Many retirement plans include the ability to invest in ETFs. That means the moment a spot Solana ETF is approved and listed, a broad universe of retirement dollars can reach it without any special paperwork or direct cryptocurrency custody. And without those barriers, it’s simply a lot easier to attract capital.

When the Bitcoin and Ethereum ETFs were approved, registered investment advisors and platforms could add the funds to their offerings and ticket them for clients, including in tax-advantaged accounts. The result was a steady drumbeat of new capital flowing in.

For Solana, approval would be less about a single day’s price pump and more about unlocking a distribution channel that did not exist the day before. If you believe the long-run investment thesis for blockchains that provide fast settlement and vibrant developer ecosystems, opening the retirement money spigot matters. Just be aware that the biggest benefit of this tailwind will accrue over the long term, not the first day the ETFs are available, assuming they get approved.

2. Even one approval can pull index flows into Solana

Indexing is an often-unnoticed force in every asset class, and it only benefits a few of the largest cryptocurrencies so far.

Solana already sits in major crypto benchmarks that asset managers use, so, if it were easily purchaseable, like via an ETF, it would become a component of any funds based on tracking those same indexes. Once a U.S. spot ETF exists, index-tracking vehicles issued by asset managers or investment companies can offer exposure with simple, auditable positions that fit compliance checklists. The odds are high that they will choose to create those vehicles if sentiment about the future of the crypto sector remains sufficiently positive — and it probably will.

The main upshot is that index flows tend to compound in the background, and they tend to be sticky. That suggests Solana’s price could be buoyed upward for a long time.

3. Markets are braced for rejection or delay

Skepticism and hesitation have been features of the Solana ETF story thus far.

The SEC has previously alleged in enforcement pleadings that tokens including Solana were originally offered as unregistered securities, which is a legal overhang that led many to caution that Solana ETFs might come later than investors hoped. That caution helped anchor expectations toward delay or denial.

Then in late May, the SEC opted to delay its ruling on five of the Solana ETFs. In mid-August, another three ETF applications were pushed back until October. So it’s quite possible that when Oct. 16 rolls around, there will be another delay.

At the same time, boxes the SEC cares about for regulatory compliance and market surveillance have been getting ticked. And the Trump administration has tended to be very dovish when it comes to regulating crypto.

Put all of these happenings together and you get a market that has argued both sides, with plenty of investors staying cautious until the ruling arrives.

If the SEC delivers approvals, the release of pent-up demand from advisors, index users, and retirement channels could be abrupt. If it denies, expect some volatility, but also expect issuers to revise and refile, as they have in every prior crypto ETF approval cycle to date.

Given what happened with Bitcoin and Ethereum’s ETFs, Solana ETFs are almost certainly going to be approved eventually, so the smartest move in the event of a rejection by the SEC will be to buy the dip and hold tight.

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Alex Carchidi has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.