- Grayscale has submitted an S-1 filing to convert its Solana Trust into a spot ETF to be listed on NYSE Arca.
- The proposed Solana ETF will hold spot SOL without staking to align with current regulatory expectations.
- Institutional demand and prior Bitcoin and Ethereum ETF approvals are driving efforts to launch Solana-based ETFs.
Grayscale Investments has submitted a new S-1 registration statement with the U.S. Securities and Exchange Commission(SEC) to transform the Solana Trust into a spot ETF. Once approved, the proposed Grayscale Solana Trust ETF(GSOL) will be listed in NYSE Arca.
The filing is part of a broader industry effort to introduce more ETFs based on cryptocurrencies after previous approval for Bitcoin and Ethereum ETFs. Grayscale aims to expose its investors to Solana (SOL) in a way that will meet regulatory requirements without owning the underlying asset.
SEC Review Pending for ETF Conversion
Grayscale’s conversion request is still pending final approval of the 19b-4 form filed by NYSE Arca in late December 2024. This form lists new financial products, which means that it must be signed before the Solana ETF is put on the market.
The SEC has not approved any of the Solana ETFs tokens. However, Grayscale filing comes as other players in the industry submitted similar filings, such as Fidelity. Analysts anticipate a decision in the coming months as regulatory sentiment toward digital asset ETFs evolves.
Solana ETF to Hold Spot SOL Without Staking
With approval, the Grayscale Solana Trust ETF will hold Solana as its underlying asset and grant investors exposure to Solana directly through their traditional brokerage accounts. The ETF will not do staking, which is locking tokens to support network validation in exchange for rewards.
The exclusion of staking aligns with previous adjustments made by asset managers for Ethereum ETFs. By removing staking-associated items, they are following regulatory anxieties around the ability to serve proof-of-stake tokens under current law as securities.
Growing Institutional Interest in Solana
Increased institutional interest in alternative digital assets than Bitcoin and Ethereum pushed for a spot in Solana ETF. Solana has been generating buzz because of its fast transactions and growing ecosystem, especially in decentralized finance (DeFi) and non-fungible tokens (NFTs).
Grayscale has also pursued ETF conversions for digital assets such as Litecoin, Polkadot, and Avalanche. The success of the first Bitcoin and Ethereum spot ETFs has put similar ETFs on the queue, which could further enhance the market accessibility for institutional and retail investors.
The filing builds on previous steps in expanding regulated options to invest in cryptocurrency in the U.S. The SEC’s stance on Solana ETFs remains unclear, but approval would give investors a new way to invest in SOL through traditional financial markets. Moreover, the outcome of this application might also be included in future trends around crypto ETFs.
