Is VanEck’s JitoSOL ETF the Silent Catalyst That Could Skyrocket Solana’s DeFi Revolution?

Ever wondered if the next big leap in crypto investing might just come from where you least expect it? Well, hold onto your hats because VanEck, a heavyweight with a whopping $133 billion in assets under management, has just tossed its hat into the ring by filing for a spot Solana ETF — but here’s the kicker — it’s fully backed by a liquid staking token, JitoSOL. Yeah, you heard that right. This isn’t just any ETF filing; it marks a historic first for liquid staking tokens, those savvy tokens that represent staked assets locked up earning rewards. Now, before the bulls get too cozy, the $2 price mark for JitoSOL is looming as a make-or-break hurdle to keep this rally rolling. Is this the dawn of a new era for institutional crypto adoption, or just another blip awaiting regulatory scrutiny? Either way, the implications for Solana staking and DeFi could be massive, potentially shaking up liquidity and tax clarity like never before. Let’s dive into what this means for traders and long-term investors alike. LEARN MORE

Key Takeaways 

VanEck has filed a historic spot Solana ETF fully backed liquid staking token JitoSOL. In the near term, Jito bulls may need to clear $2 hurdle to advance the rally. 

VanEck, a $133B asset manager, has become the first issuer to apply for a JitoSOL ETF with the SEC (Securities and Exchange Commission). 

This was also historic as it was the first filing for a liquid staking token (LST) or deposit receipt tokens that represent the amount of tokens locked in staking operations.

It will be a Solana [SOL] ETF but fully backed by JitoSOL (which represents staked SOL in the Jito protocol). 

Source: SEC

A win for Jito and Solana staking?

For his part, Tushar Jain, co-founder of Solana-focused Multicoin Cap, said the update was ‘a huge win for Jito and Solana.’

However, the filing was part of a long collaboration with the SEC staff and the liquid staking platform, Jito, the Web 3 firm noted in a statement. 

In fact, in May, the SEC clarified that protocol staking for PoS (Proof-of-work) networks didn’t constitute a security. 

Additionally, in early August, the regulator noted that LSTs were ‘technical receipts’ and do fall within the security definition or investment contract.

This will eventually pave the way for staking in spot ETFs to enhance liquidity and tax clarity, according to experts. 

On the VanEck filing, the liquid staking platform added that, 

“Jito will remain at the tip of the spear for institutional adoption.”

Others also viewed the move as a positive development for the liquid staking market, and specifically Solana DeFi.

The update extended the rally of Jito [JTO], the native token of Jito, to 10% on the weekly charts.

While the rally mounted above the 100-day Simple Moving Average, underscoring bullish strength, it hit a $2 resistance zone (red). 

Source: Jito/USDC, TradingView

Unless bulls flip $2 to support, the altcoin’s rally could cool off in the near term. If bulls manage to extend the rally, the immediate upside target would be $2.2. 

The short-term cool-off was also observed amongst top Binance traders. They trimmed their long position from 62% to 49% in the past two days, suggesting profit-taking. 

Source: Coinglass

This meant that the $2 overhead resistance could become a key supply zone in the near term if more players realized their profits at that level.

Even so, the ETF expectations could become a key catalyst for traders and long-term investors.