Analyst Warns of Potential “Grayscale Effect” on Solana in 2025

Data researcher Ben Lilly says the crypto market may face significant turbulence this year, particularly for Solana (SOL). He predicts a “Grayscale Effect” that could put pressure on SOL prices.

The term refers to the potential impact of scheduled share unlocks from the Grayscale Solana Trust, which is set to occur twice in 2025 — between January 24 and February 2 and July 24 to August 7.

Implications of the Grayscale Effect on Solana

The “Grayscale Effect” draws from past experiences with the Grayscale Bitcoin Trust (GBTC). When Grayscale unlocks its shares, investors typically sell them to capitalize on the premium — the difference between the net asset value (NAV) of the underlying asset (Bitcoin or Solana) and the share price. Historically, this has led to increased selling pressure, sharp price declines, and, in some cases, market-wide turbulence.

Lilly pointed out that a similar scenario unfolded in 2021 with GBTC. When the premium disappeared, Bitcoin’s market peaked before a severe correction ensued, contributing to the collapse of firms like 3AC, Celsius, and Voyager.

Lilly argues that the Grayscale Solana Trust (GSOL) could replicate this pattern. When SOL unlocks occur, investors may offload their shares en masse, squeezing the premium and driving prices lower. For instance, an earlier unlock between July 26 and July 31, 2024, reportedly resulted in a 40% drop in SOL prices within ten days.

“This cycle, it appears Grayscale is running the same trade with its Solana version,” Lilly observed.

According to the data researcher, the upcoming unlock in January 2025 may produce a similar effect. Investors who purchased SOL shares at a premium will likely sell once their lock-up period ends, creating downward pressure on prices. Lilly warns that January 27, 2025, could mark the “beginning of the end” for GSOL premiums, with subsequent market corrections to follow.

“The next wave is starting Jan 24 and will last until Feb 2. When these buyers purchased SOL, the premium was healthy. When these investors go to collect their premium, it might be the last unlock to collect,” he added.

What This Means for SOL Holders and Investors

Lilly emphasizes that while the Grayscale Trust for Solana is relatively small compared to SOL’s total market cap, its influence should not be underestimated. Historical data suggests that even small unlocks can cause significant price disruptions.

The second major unlock scheduled for July-August 2025 could also mark another critical period for SOL holders. Beyond leading to short-term local tops, these unlock events could also signal a cycle top reminiscent of Bitcoin’s trajectory in 2021.

Based on this, investors should exercise vigilance around these key dates. Should Solana experience a price rally at the start of 2025, Lilly suggests selling the move before the unlock begins. He cautions that both January and July 2025 could be high-risk periods for SOL due to the anticipated selling pressure.

BeInCrypto data shows SOL was trading for $213.63 as of this writing, representing a modest 2.56% surge since Friday’s session opened. As of press time, Solana’s price is up nearly 12% since January 1, when it traded for $189.31.

Meanwhile, although the Grayscale Effect poses a clear risk for Solana, it also highlights broader concerns about the influence of institutional crypto products on market stability. Similar trust mechanisms and unlock schedules have historically led to significant price fluctuations across various assets.

Market participants, especially SOL holders, should prepare for potential volatility in early and mid-2025. Strategies such as hedging with derivatives or diversifying portfolios may help mitigate risks associated with these unlocks.

“Yikes and that is on top of the massive unlocks coming from the FTX estate sale,” another user on X quipped.