BitWise Solana Staking ETF to go Live Despite Government Shutdown

The New York Stock Exchange has certified the listing and registration of the Bitwise Solana Staking ETF (BSOL), marking a historic day for the Solana network. Trading is expected to begin on Tuesday 28th of October, as per the listing notice.

$SOL ETF approval comes at an opportune moment. Institutional demand for the asset is at an all-time high, and the question now becomes whether inflows will match expectations.

Will the inclusion of staking rewards from Day One ensure Solana ETFs outperform rival crypto ETFs at launch, and how has $SOL reacted to its new status as a TradFi asset?

$SOL ETFs Approved 15 Months After Original Filing

When VanEck first filed for a Solana ETF in July 2024, experts and analysts laughed them out of the building. Lamenting the reigning regulatory landscape, Bloomberg’s Eric Balchunas posited that without a change in leadership in the White House, $SOL ETF approvals didn’t have “a snowball’s chance in hell” of hitting traditional markets.

15 months and one dramatic election later, no less than eight new $SOL ETFs filings have been made, with Bitwise’s Solana Staking ETF the second to get the green light. REX-Shares $SSK, a hybrid product composed of $SOL and $SOL ETPs, has been live since July.

With BSOL scheduled to begin trading on the New York Stock Exchange on October 27, institutional traders and investors will be able to finally gain exposure to $SOL in earnest.

Moreover, according to Balchunas, the Grayscale Solana ETF is set to convert the following day on October 28, assuming there is no further intervention from the SEC.

What Inflows Can We Expect?

Earlier this year, SolanaFloor published an analysis report anticipating potential ETF flows. Cross-referencing the AUM-to-Market Cap ratios of existing $BTC and $ETH ETFs, it would be reasonable to assume that Solana ETFs could see anywhere between $3B and $11B in capital inflows after one year’s trading, based on $SOL price.

However, there are still some lingering variables that could influence capital flows. Unlike Ethereum ETFs, their $SOL-based counterparts will include staking rewards from day one. The absence of staking rewards in Ethereum ETFs when they originally launched is believed to have discouraged investors from gaining exposure. 

Given that $SOL ETFs are expected to pay out around 4-5% annual yield, these funds may be considered more attractive to investors than ETH funds back in July 2024.

However, for all the excitement around the issuers operating Solana ETFs, there is one glaring omission. At this point in time, BlackRock, the world’s largest asset manager, has not expressed any intention of launching a $SOL ETF. 

The firm’s $BTC and $ETH funds command the vast majority of inflows in their respective assets. Without a BlackRock fund, Solana may not witness the same institutional demand as its peers.

$SOL Surges Back Over $200

Just weeks after the biggest liquidation event in crypto history, $SOL is showing signs of considerable strength. Off the back of Bitwise’s Solana Staking ETF approval, $SOL has reclaimed $200, with 7 further ETFs now expected to be listed in the immediate term.

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