Key Takeaways
- Multiple leading funds, including Grayscale, ARK Invest, VanEck, Fidelity Investments, and Canary Capital, have filed applications to launch Solana ETFs, highlighting strong institutional interest in Solana’s blockchain capabilities.
- The potential approval of Solana ETFs could significantly influence its market dynamics by increasing institutional adoption, liquidity, and price.
- Regulatory uncertainty surrounding Solana’s classification as a security under the Howey Test has delayed ETF approvals, but recent shifts toward crypto-friendly policies may accelerate progress.
- Solana’s capped total supply and focus on scalability and cost-effective transactions make it an attractive investment option for funds and institutional clients.
2024 has been the year of crypto exchange-traded funds (ETFs), marking a turning point for digital assets in traditional finance. Bitcoin and Ethereum ETFs have taken center stage, with Bitcoin ETFs alone pulling in over $1 billion in investments within their first month of approval. Developments have increased confidence in cryptocurrencies and brought them closer to mainstream acceptance.
Now, Solana is lining up for its moment in the ETF spotlight. However, progress has been slow, thanks to the SEC’s ongoing debate over whether Solana should be classified as a security. This indecision and legal battles involving crypto companies have kept things on hold. But change is in the air.
With the Trump administration’s anticipated crypto reforms, several leading funds have applied to launch their own Solana ETFs. In this article, we’ll discuss the companies behind these ETF applications and explore their impact on Solana.
5 Funds Poised to Launch a Solana ETF
| Fund | CEO | % of Solana Supply |
|---|---|---|
| Grayscale Investments | Peter Mintzberg | 0.1 |
| ARK Invest | Cathie Wood | Undisclosed |
| VanEck | Jan van Eck | Undisclosed |
| 21Shares | Hany Rashwan | Undisclosed |
| Canary Capital | Steven McClurg | Undisclosed |
1. Grayscale Investments
Led by Peter Mintzberg, Grayscale has made its mark in Bitcoin and Ethereum ETFs, allowing investors to tap into digital assets without owning the actual coins. Now, they’re turning their attention to Solana.
Grayscale teamed up with NYSE Arca to file a Solana ETF application with the SEC. This move shows they see huge potential in Solana, a blockchain known for its fast transactions and ability to handle large workloads.
The ETF plans to turn the current Grayscale Solana Trust into a spot ETF, similar to how it changed its Bitcoin and Ethereum trusts into ETFs. The Solana Trust is currently the largest investment fund for Solana, with about $134.2 million in assets. This comprises around 0.1% of all circulating SOL.
If approved, the Solana ETF would allow investors to participate in the action without buying or managing the tokens themselves.
2. ARK Invest
Cathie Wood’s ARK Invest has been championing innovative technologies, and cryptocurrency is no exception. As an advocate for decentralized systems, Wood has consistently emphasized the transformative potential of blockchain networks. ARK’s venture into Solana aligns with its mission to identify high-growth opportunities.
The Solana ETF application, filed in 2024, reflects ARK’s recognition of Solana as a blockchain designed for high-speed, cost-effective transactions, particularly appealing for decentralized applications (dApps) and finance (DeFi). With ARK already managing successful Bitcoin and Ethereum ETFs, its Solana endeavor further cements its commitment to expanding crypto investment opportunities.
3. VanEck
Known for its strong presence in the traditional finance sector, VanEck has expanded its services to include digital assets. The firm launched its Bitcoin Strategy ETF, quickly gaining attention from retail and institutional investors.
VanEck’s CEO, Jan van Eck, has been leading the firm’s efforts to integrate more crypto assets into its portfolios, including Ethereum ETFs. Now, VanEck has turned its focus to Solana. The firm filed for a Solana ETF, joining the growing list of companies that could launch their ETF after approvals.
4. 21Shares
21Shares is a leading provider of crypto exchange-traded products (ETPs), focusing on giving investors secure and easy access to digital assets. Since its start, CEO Hany Rashwan has led 21Shares to become a European leader in crypto-backed ETPs. 21Shares’ portfolio includes products that expose investors to major cryptocurrencies like Bitcoin and Ethereum.
In 2024, the company filed for a Solana ETF and is part of the growing list of funds expected to launch its SOL product after approval.
5. Canary Capital
A boutique investment firm known for its focus on blockchain innovation, Canary Capital has entered the Solana ETF race. The firm has built a reputation for identifying emerging opportunities in decentralized technologies, often backing projects with strong technical foundations and growth potential.
Canary Capital’s Solana ETF filing reflects its belief in the network’s capability to support high-performance decentralized applications (dApps) and financial services. Canary Capital strategically targets high-value niche opportunities, making its Solana ETF move a calculated risk.
Would a Solana ETF Affect Solana Price?
A Solana ETF could significantly influence SOL’s price. ETFs simplify the investment process and make assets more accessible to institutional and retail investors. New SOL demand may surge with ETF fund inflows.
Historically, Bitcoin and Ethereum experienced price upticks after ETF approvals, as they signaled regulatory clarity and mainstream acceptance. While past performance doesn’t always indicate future results, a similar effect on Solana is plausible.
What’s the Total Supply of Solana?
Solana’s total supply is 589 million SOL tokens, with approximately 475 million circulating. The remaining tokens are allocated to staking rewards and ecosystem development. Unlike Bitcoin’s deflationary model, Solana employs a controlled inflation mechanism to reward validators while maintaining network security.
ETFs from prominent funds collectively holding millions of SOL tokens highlight the asset’s market significance. These holdings represent a sizable portion of the circulating supply, adding weight to the potential market impact of Solana ETFs.
Is Solana a Security?
The SEC’s hesitation around Solana ETFs stems from the debate over Solana’s qualification as a security under US law. The determination hinges on the Howey Test, which examines whether an asset is an investment contract. If an asset involves investing money in a common enterprise with an expectation of profits derived from others’ efforts, it may be classified as a security.
While Solana’s decentralized blockchain supports this ambiguity, its token distribution and early sales could attract scrutiny. The classification decision carries significant implications, potentially shaping Solana’s regulatory framework and investor appeal.
However, the regulatory environment may shift with the Trump administration signaling a more crypto-friendly approach. Industry observers are optimistic about the prospects of ETFs and broader crypto adoption under this new climate.
Closing Thoughts
Crypto investors are watching closely as Solana ETFs move toward potential approval. Five major funds—Canary Captial, ARK Invest, VanEck, Fidelity, and Grayscale—lead the charge, holding a substantial amount of SOL tokens. These ETFs could transform Solana, driving liquidity and mainstream adoption while elevating its market presence.
Despite hurdles, including the SEC’s scrutiny over Solana’s classification, the evolving regulatory landscape suggests brighter days for crypto ETFs. As 2024 wraps up, the Solana ETF story signals a promising chapter for digital asset integration into traditional finance.
