Bitwise Joins Race for Solana ETF Amid Growing Interest in Crypto ETFs

Bitwise, a leading digital asset manager, officially filed for the registration of a "Bitwise Solana ETF Trust" in Delaware, marking another step in the growing competition among firms seeking to introduce Solana-focused exchange-traded funds (ETFs). The filing, dated November 20, 2024, was submitted under Form S-1 to the United States Securities and Exchange Commission (SEC).

Details of the Filing

The filing, accessible via the State of Delaware’s Division of Corporations website, names CSC Delaware Trust Company as the registered agent, headquartered in Wilmington, Delaware. However, the application does not specify which stock exchange would host the Solana ETF or reveal the proposed ticker for the product.

Notably, Bitwise's Bitcoin and Ethereum ETFs are currently listed on the New York Stock Exchange (NYSE) Arca, suggesting a potential path for the Solana product if approved.

The Solana ETF proposal places Bitwise in direct competition with asset management firms like VanEck and Canary Capital, which have also submitted Solana ETF applications in recent months. 

Potential Impact on Solana and the Crypto Market

If approved, the Bitwise Solana ETF would offer institutional and retail investors exposure to Solana's price movements through a regulated product, potentially boosting its mainstream adoption. Despite this, market analysts predict smaller inflows into Solana ETFs compared to Bitcoin and Ether ETFs, given Solana’s relatively niche appeal in the broader crypto market.

Nonetheless, optimism remains strong among crypto enthusiasts. A successful Solana ETF could further validate Solana as a leading blockchain while diversifying the range of crypto investment options available to U.S. investors.

Regulatory Hurdles Await

For Bitwise to fully join the ETF race, it must submit additional documents, including a 19b-4 filing and a comprehensive S-1 registration statement, to the SEC. Despite optimism from crypto advocates, the SEC's approval process for crypto ETFs remains uncertain under its current leadership.

To date, Bitcoin is the only cryptocurrency officially recognized as a commodity by U.S. regulators. The ambiguity surrounding the regulatory classification of tokens like Solana has caused frustration among investors.

However, some industry experts, including Matthew Sigel, head of digital asset research at VanEck, express confidence in the approval of Solana ETFs by 2025, contingent on changes in SEC leadership under Donald Trump's presidential administration.

At the time of writing, Solana (SOL) is trading at $240.51, with a market cap of $114 billion, per CoinMarketCap.