GSR says Solana SOL -2.75% “continues to distance itself from the pack” and is now going long on the cryptocurrency.

In a note out Thursday, GSR trumpeted Solana’s “superior technology” and the changing U.S. political landscape for why a spot Solana ETF could be next in line following the launch of spot Bitcoin ETFs in January and the anticipated launch of spot Ethereum ETFs later this summer.

The note was published on the same day that fund manager VanEck filed for an exchange-traded fund that would track the price of Solana.

"[C]hange is already afoot with Donald Trump’s newfound backing of the crypto industry, which has in turn caused Democrats to loosen their stance against digital assets in a tight election year,” GSR analysts wrote in the report.

“And while the current legislative and regulatory makeup is unlikely to adopt rules enabling the launch of myriad spot digital asset ETFs, a Trump administration and liberal SEC Commissioner could do exactly that,” they continued, “with the possibilities truly opening up with a securities and commodities-defining digital asset market structure bill.”

Solana’s market demand and decentralization set it up to join Bitcoin BTC -0.033% and Ethereum in the spot ETF market, according to GSR’s scorecard for determining such characteristics. Ethereum came in first place by a wide margin and was followed by Solana, which outpaced the next closest digital asset, Near, by a large margin.

Source: GSR

GSR also laid out three core reasons Solana’s technology gives it a competitive advantage, starting with Solana’s proof-of-history.

“Similar to cell towers alternating transmission to avoid noise, proof-of-history enables validators to produce blocks when it’s their turn without requiring the network to first agree upon the current block, resulting in massive speed and scalability advantages,” the firm said.

Secondly, GSR said Solana “enables parallel transaction processing to not only materially increase throughput, but also take advantage of the main source of improvement in computing speeds, with most gains today coming from adding more cores rather than improving the performance of each one.”

Finally, GSR noted Solana’s historically high hardware and bandwidth requirements optimize for speed and security at the expense of decentralization but said it's "naturally positioned to benefit as costs fall over time…to perhaps be the first to truly solve the blockchain trilemma and ultimately achieve its vision of synchronizing global state at the speed of light."

SOL could outperform BTC

As for the impact on SOL, GSR noted BTC rising from $27,000 in October (i.e., "when market participants began to ascribe a real possibility" of U.S. spot ETF approval) to its current price of about $63,000 – a 2.3x increase.

"Solana may increase 1.4x under the bear flows scenario, 3.4x under the baseline scenario, and 8.9x under the blue sky scenario," according to GSR analysis. "Moreover, there are reasons to believe the impact could be higher than these estimates, since unlike BTC, SOL is actively used for staking and within decentralized applications and as the relationship between relative flows and relative size may not be linear."

SOL spiked more than 6% on the VanEck news and is up about 7.7% over the past 24 hours, according to The Block's Solana price page. Solana's market capitalization stands at around $68 billion at publication time.

Update: This article has been updated to no longer say that this is the first time GSR has been long on a token after its spokesperson corrected their previous statement.