GSOL - GSOL: Fade The Trust Long Solana

2024-07-17 09:00:58 ET

Summary

• GSOL's NAV rate premium has once again trended up near 800%.
• Given the volume data from the March sell-off, the illiquidity of the fund foretells price declines in 2025 even if Solana's price increases.
• Shares outstanding have doubled year to date. Lockups for these new private placements will start expiring in Q1-24.

When I last covered the Grayscale Solana Trust ( GSOL ) for Seeking Alpha, GSOL traded at an 800% premium to the net asset value of the fund's shares. This update is not going to be a re-write of that same piece from early-March. Rather, we'll look at the more updated NAV rate, private placement data, and the fundamental setup for Solana as a blockchain network. First, this excerpt from my March article is probably one of the most important things to understand for those who have not yet seen the prior work:

This particular fund is designed for the sole purpose of offering investors exposure to the native asset of the Solana ( SOL-USD ) blockchain, SOL. That's it. There is no other asset or business underlying GSOL but SOL. Thus, the valuation of the GSOL shares relative to the SOL that each share represents is arguably the most important factor in determining if GSOL shares are a buy or a sell.

For further details see: