Slow Start for Solana Futures on CME Signals Low Institutional Interest
Solana (SOL) futures made their debut on the Chicago Mercantile Exchange (CME) to a relatively indifferent market. With a volume of only $12.3 million on the first day of trading and an open interest closing at $7.8 million, investor enthusiasm seems limited. This modest entry sharply contrasts with the launches of Bitcoin and, to a lesser extent, Ethereum, which had much more significant excitement during their own debuts.
Unfavorable Comparison to Bitcoin and Ethereum
When Bitcoin entered the CME futures market in December 2017, its trading volume reached $102.7 million on the first day, with $20.9 million in open interest. Ethereum, on the other hand, recorded $31 million in volume and $20 million in open interest during its launch in February 2021. Solana’s performance is therefore well below these historical precedents, raising questions about institutional appetite for altcoins in the current context.
Launches in a Less Favorable Environment for Solana
However, analysts at K33, Vetle Lunde and David Zimmerman, highlight a key element: the launch of Solana futures comes at a time of less favorable market conditions for risk-taking. Unlike Bitcoin, which benefited from a 2017 bull run, or Ethereum, which rode the wave of an early altcoin season in 2021, Solana enters the market in a climate of uncertainty, where no major catalyst is pushing investors to expose themselves further.
When adjusted for the market capitalization of each asset at their respective launches, K33 estimates that the relative performances remain comparable. But in absolute value, interest remains low, and the caution of institutional investors is felt.
Limited Impact for a Potential Solana ETF
One of the expectations surrounding the launch of Solana futures was its role as a prelude to a spot ETF, in the event that the Securities and Exchange Commission (SEC) would approve such a product. However, according to K33, the potential impact of a Solana ETF on the price of SOL could be significantly weaker than that observed with the launch of the first spot Bitcoin ETF in January 2024.
While several altcoin-focused exchange-traded funds (ETFs) are awaiting validation in the United States, the mixed reception of Solana futures suggests that these products could have a much more moderate effect on their underlying assets than was seen with Bitcoin. This caution could be explained by the fact that, despite growing adoption, altcoins still struggle to establish themselves as essential assets in the eyes of institutional investors.
