Shares in Grayscale’s Solana Trust have more than doubled in the past week, pushing the price of the Solana token up nine times.
GSOL shares are trading at a record high of $202, up from $87 at the beginning of the month. With SOL at $59 on Nov 11 and the trust holding 0.38 SOL per share, that’s an insane 784% premium.
For context, the premium on Grayscale’s Bitcoin Trust, GBTC, hit a record high of 43% in July 2019.
The triple-digit premium signals the increased appetite of institutional investors for exposure to Solana. The increase comes after Solana’s native token surged 40% last week, surpassing $60 for the first time since May 2022.
Grayscale Trusts
Grayscale’s cryptocurrency trusts have become a way for US financial institutions to access cryptocurrency, as it allows them to gain exposure to digital assets while using traditional financial rails.
But unlike exchange-traded funds, units in Grayscale trusts do not directly track the market value of the trusts’ shares, leading to price premiums and discounts in the products.
Sales of foundations on the primary market, when the value of the holding and the share price are in a ratio of 1-to-1, can only be accessed by authorized investors, while small investors are at the mercy of the wild fluctuations of the foundations.
There are only $6.3 million in assets under management at GSOL, compared to $23 billion at GBTC.
ETF ambitions
Although Grayscale Trust shares are not redeemable today, many experts believe that could change soon.
Shades of gray first applied to Convert its Bitcoin Trust into an exchange-traded Bitcoin fund in October 2021, but was rejected by the US Securities and Exchange Commission (SEC). However, the US District Court of Appeals for the District of Columbia sided Grayscale appeal in August, ruling that Grayscale’s Bitcoin Trust is “materially similar” to future ETFs previously approved by the SEC.
Last month, SEC refused to appeal the court’s decision before an October deadline, fueling speculation that its ETF conversion could begin soon and pave the way for other Grayscale Trusts to undergo similar restructurings.
The news follows an immediate filing for a Bitcoin ETF Black rockof the world’s largest asset manager, in July, fueling optimistic expectations that the first exchange-traded fund to invest in spot BTC could soon receive regulatory approval.
GBTC shares similar surpassed spot Bitcoin in recent months, with GBTC up 200% YTD, while BTC gained 10% over the same period.
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