Grayscale’s latest launch- a trust with exposure to Ethereum competitor Solana

Greyscale launched an investment product with exposure to Solana.
Greyscale launched an investment product with exposure to Solana. Image from medium.com

Key Takeaways:

  • Grayscale Investments announced the launch of a new trust that provides investors exposure to Solana (SOL).
  • Solana’s native token SOL jumped nearly 23% since Nov 28.

NEW DELHI (CoinChapter.com) — The world’s largest digital asset manager, Grayscale Investments, announced the launch of Grayscale Solana Trust. The latest offering is Grayscale Investments’ 16th investment product and will passively invest in SOL, the fifth-largest cryptocurrency by market cap.

Grayscale Investments offers cryptocurrency exposure to institutional and high net-worth investors. At present, the firm has 14 single-asset investment vehicles that provide exposure to prominent cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Chainlink (LINK), Stellar Lumens (XLM), Solana (SOL), among others.

The press release stated that the Grayscale Solana Trust is available to ‘eligible individual and institutional accredited investor.’

The newly launched fund already had $9.5 million under management at the time of writing, with a 2.5% annual fee and a $25,000 minimum investment.

Why Solana?

Solana is a blockchain platform that supports smart contracts and decentralized applications, or dApps. Many experts consider Solana to be the top rival to Ethereum. Solana operates using both Proof-of-Stake (PoS) and Proof-of-History (PoH) consensus models, which helps in faster transaction verifications.

Ethereum suffers from high gas fees and slow transaction speeds, while Solana claims to be the fastest blockchain globally with a lower transaction fee. For example, the average transaction fee on Solana is $0.00025. In comparison, Ethereum currently charges roughly $40 for a transaction, making it unviable for small transactions.

Launched in March 2020 by Anatoly Yakovenko, Solana is one of the best-performing assets of the current year. On a YTD basis, Solana’s native token, SOL, is up more than 14,000%, outperforming other smart contract platforms like Ethereum, Cardano (ADA), and Polkadot (DOT) by a wide margin.

Related: FTX founder believes Solana could be the next Bitcoin but SOL continues to fall.

Moreover, Solana has support from industry leaders like crypto exchange FTX’s founder Sam Bankman-Fried. Recently, the FTX founder stated that he believes that Solana would likely become the next Bitcoin in terms of mass adoption.

In some sense, it [Solana] is a more cost-effective blockchain, and today we are seeing over 500 decentralized apps and about 1.2 million monthly active users on the network. When you kind of take a step back, and you see how quickly it has been able to ramp up, it’s certainly pretty impressive.

Grayscale CEO Michael Sonnenshein told Forbes

Moreover, Solana has $250 million worth of assets under management (AUM), as per the latest Coinshares report. In addition, DeFi projects on Solana have a TVL of $14.8 billion.

Solana Price Charts

Solana prices fell over 8% on Friday following the broad crypto market sell-off, as traders reacted to reports of a new Coronavirus strain, Omicron. However, SOL started an uptrend as it entered the weekend, rebounding from ascending trendline support.

SOL prices jumped 12.5% on Nov 30 between low ($197) to high ($222.28) levels before prices pared. The Solana token currently has immediate resistance at $225. Moreover, the Grayscale launch news would likely push prices further upwards towards $237.

In addition, SOL has tested the ascending trendline support multiple times between Sept and Nov. Each time, SOL prices have charted higher highs on the daily charts. On a historical performance basis, the Solana token might reach new highs in the current bull run.

SOLUSD daily price chart and RSI. Source: Tradingview.com
SOLUSD daily price chart and RSI. Source: Tradingview.com

On the other hand, if SOL’s current uptrend runs out of fuel, bulls would try to consolidate above immediate support at $197. If bears get a firm grip on SOL, prices could breach below immediate support to reach $185. A marketwide sell-off could bring the support at $175 into play, near SOL’s 100-day MA line.

Also Read: Solana eyes run up towards $300 as SOL paints cup and handle setup.

Meanwhile, the relative strength index for the Solana token is neutral, with a value of 51 on the daily charts. The RSI trendline seems to be moving upwards, though there is no danger of SOL going into overbought territory soon.

In addition, SOL’s recent uptrend pushed its price above its 50-Day MA line, making it bullish across all time horizons, as the Solana token was already trading above its 100-day MA line.

SOLUSD daily price charts and MACD. Source: Tradingview.com
SOLUSD daily price charts and MACD. Source: Tradingview.com

Furthermore, bars on the MACD histogram have remained negative after trend-based momentum oscillator MACD charted a bearish crossover on Nov 11. In detail, the bars on the MACD histogram plot the difference between the MACD line (difference between 12-day and 26-day) and its signal line (9-day EMA of MACD).

However, the MACD bars are now contracting, indicating that the MACD line is moving upwards. As such, the MACD may soon plot a bullish crossover if the uptrend does not falter.

SOL was trading at $214 at the time of writing, up 4.80% on the day.

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Solana, Grayscale’s latest launch- a trust with exposure to Ethereum competitor Solana

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