Grayscale Solana Trust Shares Surge To Insane 784% Premium

Shares in Grayscale’s Solana Trust have more than doubled in the past week, surging to nine times the price of the Solana token.

GSOL shares are trading at a record $202, up from $87 at the start f the month. With SOL at $59 on Nov. 11 and the trust holding 0.38 SOL per share, that’s an insane premium of 784%.

For context, the premium on Grayscale’s Bitcoin Trust, GBTC, touched a record of 43% in July 2019.

The triple-digit premium signals increased appetite from institutional investors to get exposure to Solana. The rally comes as Solana’s native token surged 40% in the past week, breaching $60 for the first time since May 2022.

Grayscale Trusts

Grayscale’s cryptocurrency trusts have become the go-to way for financial institutions in the U.S. to access crypto, as it allows them to get exposure to digital assets while using traditional finance rails.

But unlike exchange-traded funds, holdings in Grayscale trusts don’t directly track the market value of shares of the trusts, which leads to price premiums and discounts in the products.

Primary market sales of the trusts, when holding value and share price are at 1-to1, can only be accessed by accredited investors, with retail investors left to the mercy of the trusts’ wild fluctuations.

There is only $6.3M of assets under management in GSOL, compared with $23B in GBTC.

ETF ambitions

Although Grayscale Trust shares are non-redeemable today, many pundits believe that may soon change.

Grayscale first applied to convert its Bitcoin Trust into a Bitcoin exchange-traded fund in Oct. 2021, but was knocked back by the U.S. Securities and Exchange Commission (SEC). However, the U.S. District of Columbia Court of Appeal sided with Grayscale’s appeal in August, ruling that Grayscale’s Bitcoin Trust is “materially similar” to futures ETFs previously approved by the SEC.

Last month, the SEC declined to appeal the court’s decision before its October deadline expired, fuelling speculation that its ETF conversion may soon go ahead and pave the way for other Grayscale Trusts to undergo similar restructurings.

The news followed a spot Bitcoin ETF application from BlackRock, the world’s largest asset manager, in July, which ignited bullish expectations that the first exchange-traded fund investing in spot BTC may soon receive regulatory approval.

GBTC shares similarly outperformed spot Bitcoin in recent months, with GBTC up 200% year-to-date while BTC gained 10% over the same period.