Multiple Solana Staking ETFs Could Get SEC Approval Within Two Weeks

TLDR

• Major ETF firms including Grayscale, Fidelity, Bitwise, VanEck and others filed amended S-1 documents with the SEC for Solana ETFs that include staking features
• ETF analyst Nate Geraci predicts approval could come within two weeks due to streamlined SEC processes
• All filings include staking provisions allowing funds to earn yield through Solana’s proof-of-stake mechanism
• Bitwise’s European Solana staking ETP attracted $60 million in inflows over five trading days
• The REX-Osprey Solana Staking ETF already launched in the US with $12 million in inflows on day one

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Several major asset management firms have submitted fresh applications for Solana exchange-traded funds that include staking capabilities. The filings could receive regulatory approval as soon as mid-October.

ETF analyst Nate Geraci from NovaDius Wealth Management predicted approval within two weeks on Friday. His forecast follows amended S-1 filings submitted to the Securities and Exchange Commission by seven major firms.

Franklin Templeton, Fidelity Investments, CoinShares, Bitwise Asset Management, Grayscale Investments, VanEck, and Canary Capital all filed updated documents on Friday. The S-1 form provides comprehensive disclosure about company financials and intended securities offerings.

The key feature in these new filings is staking functionality. This would allow ETFs to generate additional yield by participating in Solana’s proof-of-stake validation system.

Each fund would place Solana holdings into designated staking accounts. The structure enables funds to earn rewards through Solana’s consensus mechanism, receiving compensation in either cash or SOL tokens.

These staking rewards would be treated as fund income. The additional revenue could enhance net asset value and provide extra benefits for shareholders.

Growing Market Demand

The timing follows strong investor interest in Solana products globally. Bitwise’s European Solana staking ETP recorded $60 million in inflows during the past five trading days alone.

In the United States, the REX-Osprey Solana Staking ETF has shown consistent growth. The fund launched on the Cboe BZX Exchange just over two months ago with $33 million in trading volume and $12 million in inflows on its first day.

The REX-Osprey product recently surpassed $250 million in assets under management. It recorded $10.6 million in net inflows in a single trading session.

REX-Osprey restructured its fund structure earlier this month for improved tax efficiency. The company converted from a C-Corporation to a regulated investment company, removing federal and state taxes at the fund level.

Bloomberg analyst James Seyffart highlighted the coordinated nature of Friday’s filings. All major issuers submitted their amendments simultaneously, suggesting potential regulatory coordination.

Regulatory Environment

The SEC’s approach to crypto ETFs has evolved recently. In September, regulators approved Grayscale’s ETH products moving from case-by-case approvals to standardized listing frameworks.

This shift allows similar products to trade without repeated individual approvals. The streamlined process could accelerate future crypto ETF launches.

Geraci also noted the staking provisions could benefit existing Ethereum ETF applications. US ETF issuers have filed multiple requests for Ether staking permissions throughout 2024.

The inclusion of staking in Solana filings may establish precedent for other proof-of-stake cryptocurrencies. Markus Thielen from 10x Research told Cointelegraph that Ethereum ETF staking could “dramatically reshape the market.”

Grayscale has expanded beyond single-asset products with its CoinDesk Crypto 5 ETF. The diversified fund includes Solana and XRP, recording $22 million in first-day trading volume.

With regulatory processes streamlined, first Solana ETF approvals could arrive in the first or second week of October according to current analyst predictions.

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