Solana's potential impact may hinder progress of Ethereum ETFs towards bearish territory

New studies show that Ethereum ETFs might have a good chance of approval.
Although Ethereum faced competition from Solana, the price of ETH continued to rise.

Let’s talk about Ethereum [ETH] and the recent buzz surrounding the potential approval of Ethereum ETFs.

What’s the Buzz About ETFs?

Despite the uncertainties around approval timing, data from Coinbase suggests that a U.S. spot ETH ETF approval is more of a “when” than an “if.

However, concerns about Ethereum’s proof-of-stake mechanism compared to Bitcoin could be a reason for delays in approval.

Until clearer regulatory guidelines on asset staking are established, the approval of spot ETH ETFs that allow staking might take some time. But the consensus is that unstaked ETH should remain unaffected.

There’s a 30-40% chance of a positive surprise in the approval decision, especially considering crypto’s growing importance in elections and the potential for legal challenges against a rejection.

Furthermore, not all spot ETH ETF applications need to be approved simultaneously, as highlighted by Commissioner Uyeda’s comments on spot BTC ETF approval.

Facing Competition

While the likelihood of Ethereum ETF approval looked promising, Ethereum was also grappling with challenges from other Layer 1 chains, especially the rising star, Solana [SOL].

Solana’s highly scalable platform and low transaction fees have attracted attention, diverting trading activity away from Ethereum’s mainnet.

In the past year, Solana’s ecosystem has experienced significant growth, with its share of decentralized exchange (DEX) volume jumping from 2% to 21%.

Source: Coinbase

In addition, the rise of memecoins on the Solana network is luring users away from Ethereum towards Solana.

Explore Ethereum’s [ETH] Price Prediction 2024-25

Despite these challenges, ETH’s price has been on the upswing, with ETH currently trading at $3,117.82, reflecting a 2.11% increase in the last 24 hours.

Despite the price rise, a decline in Network Growth suggests a diminishing interest from new users in Ethereum.