SOL Strategies stock jumps 25% following $500 million raise to buy more Solana

SOL Strategies, an investment firm listed on the Canadian Securities Exchange, has secured a $500 million convertible note facility to buy more Solana, adding fuel to the growing institutional interest in the cryptocurrency.

Following the announcement, its shares, under ticker HODL, surged 25.27%, closing Wednesday's session at CAD 2.28 ($1.64), according to Google Finance data.

The agreement, made with New York-based investment firm ATW Partners, is said to be a first-of-its-kind and the largest financing facility in the Solana ecosystem, according to the company's Wednesday announcement.

"We are doubling down on our conviction in Solana and our commitment to being the leading institutional staking platform," SOL Strategies CEO Leah Wald said.

With the financing, the company will issue $20 million in notes as the first tranche. An additional $480 million is expected to be drawn down subsequently, contingent upon certain conditions. 

"In this novel structure, interest on the Notes will be paid in SOL, calculated as up to 85% of the staking yield generated by SOL acquired through the facility and staked by SOL Strategies," the company explained.

Growing institutional interest

The Solana ecosystem has been rapidly expanding its influence in crypto, leveraging its speed and cost advantages over Ethereum to lead a massive memecoin trend and a thriving DeFi ecosystem. SOL has risen 28% in price over the past two weeks, trading at $150.2 as of publication time.

The momentum is notably attracting institutional investors, in addition to retail participation.

Sol Strategies rebranded last year from Cypherpunk Holdings — a holding company initially focused on acquiring bitcoin and crypto-related equities — to concentrate on its Solana investment strategy. As of the end of last month, SOL Strategies held 267,151 SOL tokens.

Nasdaq-listed DeFi Development Corporation also announced Wednesday that it purchased around 65,305 SOL, bringing its total to 317,273 SOL. 

DeFi Development said its treasury strategy aims to provide investors with economic exposure to SOL investments while deepening its alignment with the Solana ecosystem — similar to what the Michael Saylor-led Strategy is doing with bitcoin.

Crypto financial services firm Galaxy Digital was spotted exchanging over $100 million worth of ETH into a similar amount of SOL in recent weeks via Binance, Lookonchain reported.