There’s a certain buzz in the crypto air, a familiar scent for those who’ve watched a few cycles unfold. It’s the kind of feeling you get when a seasoned investor, someone like Bitwise Chief Investment Officer Matt Hougan, lays out a recipe for what he calls a “Solana season.” He’s not talking about a change in weather, of course. He means a period of strong price growth, much like we’ve seen with Bitcoin and Ethereum.
- Matt Hougan, Bitwise CIO, suggests a “Solana season” is imminent, driven by factors similar to past Bitcoin and Ethereum rallies. This season is characterized by strong price growth fueled by increased demand.
- The core of this predicted growth lies in the interplay of exchange-traded product (ETP) inflows and corporate treasury purchases, mirroring historical patterns where demand significantly outpaces new supply.
- Solana’s smaller market cap compared to Bitcoin and Ethereum means that even modest capital inflows could have a disproportionately larger impact on its price, amplifying potential gains.
Hougan’s latest memo to clients paints a picture of ingredients coming together. He sees a blend of exchange-traded product (ETP) inflows and corporate treasury purchases. This combination, he argues, has historically set the stage for significant market moves. It’s a classic tale of supply and demand, really, where demand outstrips what’s available, and prices tend to climb.
The Recipe for a Crypto Run
Think back to Bitcoin’s journey. In January 2024, it sat around $40,000. By the time it hit nearly $125,000, ETPs and corporations had snapped up over 1.1 million BTC. The network itself had only produced about 322,681 BTC during that stretch. That’s a significant imbalance, wouldn’t you say?
Ethereum followed a similar path. Around April 2025, its price began to triple, reaching almost $5,000 by its August peak. In that period, ETPs and corporations acquired a whopping 7.4 million ETH. Compare that to the 388,568 ETH the network actually produced. It’s not hard to see why prices reacted the way they did.
This isn’t rocket science. It’s the fundamental economic principle Hougan highlighted. When there’s far more buying interest than new supply, the market responds. It’s a simple truth that often gets lost in the noise of daily trading.
Why Solana is Next in Line
Now, the spotlight shifts to Solana. Hougan believes the same conditions are lining up for SOL. Several major players, including Grayscale, VanEck, Franklin Templeton, Fidelity, Invesco/Galaxy, Canary Capital, and Bitwise itself, have filed for spot Solana ETFs in the U.S. The Securities and Exchange Commission (SEC) is expected to make a decision by October 10. This could mean multiple launches before the year is out.
We’ve already seen one interesting development. In July, REX-Osprey launched the first U.S. ETF offering SOL exposure with native staking rewards. This fund, SSK, operates under the Investment Company Act of 1940, a different route than the 1933 Act used by spot Bitcoin and Ethereum ETFs. It holds actual SOL, with at least half directly staked.
However, SSK has only drawn $195.1 million in net inflows since its launch. That’s a modest sum compared to the $5.8 billion for Bitcoin ETFs and $8.4 billion for Ethereum ETFs. It remains to be seen if the more traditional spot SOL ETF products will attract greater interest.
Beyond ETFs, corporate treasuries are also making moves. Galaxy Digital, Jump Crypto, and Multicoin Capital recently pledged $1.65 billion to Forward Industries. This is a new publicly traded Solana treasury company. Its mission is to buy and stake SOL, adding to other accumulators like DeFi Development Corp., Sol Strategies, and Upexi.
Forward Industries has named Multicoin co-founder Kyle Samani as its chairman. Hougan sees Samani as a public champion for Solana, much like Michael Saylor has been for Bitcoin or Tom Lee for Ethereum. Having a vocal advocate can certainly help rally support.
But ETPs and treasury flows aren’t enough on their own. Investors need a solid reason to buy in. Ethereum ETFs, for instance, didn’t see major inflows until stablecoin adoption really took off, highlighting Ethereum’s role as the leading stablecoin blockchain. What’s Solana’s compelling pitch?
According to Hougan, it’s all about speed and cost. Solana is a programmable blockchain built for stablecoins, tokenized assets, and decentralized finance (DeFi). Transactions often cost less than a cent and, after a pending upgrade, will finalize in milliseconds. That’s significantly faster than Ethereum.
Solana also offers a simpler user experience because it doesn’t rely on Layer 2 solutions. While some critics point to greater centralization risks, Solana has carved out a strong position. It’s the third-largest blockchain in stablecoin liquidity and fourth in tokenized assets. Its tokenized assets under management (AUM) are up 140% this year. That’s not a small feat.
The Impact of Solana’s Scale
Here’s where Solana’s story takes a slightly different turn from Bitcoin and Ethereum. Its potential price impact from these catalysts is amplified by its size. Or rather, its comparative lack of size.
Bitcoin currently boasts a market cap of $2.2 trillion. Ethereum sits at $522.6 billion. Solana, by comparison, has a market cap of $119.4 billion. This means Solana is roughly 5% the size of Bitcoin and 23% the size of Ethereum. It’s a much smaller boat, so to speak.
What does this mean for investors? Hougan explained it clearly: a relatively small amount of capital flowing into Solana could have a much larger impact on its price. He suggests that Forward Industries’ planned $1.65 billion SOL purchase could have an effect similar to a $33 billion Bitcoin purchase. That’s quite a leverage.
Of course, there’s a nuance. Solana has a higher annual inflation rate, around 4.3%, compared to Bitcoin’s 0.8% and Ethereum’s 0.5%. This higher inflation can temper the price impact somewhat. New supply constantly enters the market, diluting the effect of demand.
Even with that consideration, Hougan finds the setup attractive. He advises keeping a close watch on Solana in the coming months. It seems the stage is set for an interesting period, and I, for one, will be watching to see how this recipe plays out.
