Bitwise Disrupts Crypto Industry with First U.S. Solana ETF Launch
Bitwise Asset Management has shaken up the crypto market by becoming the first firm to launch a U.S. spot Solana ETF, using a regulatory loophole while the Securities and Exchange Commission (SEC) was shut down. The move has forced competitors to rethink their ETF strategies and triggered an industry-wide scramble, according to multiple executives.
Launched on October 28, the Bitwise Solana Staking ETF tracks the spot price of Solana (SOL) — the world’s sixth-largest cryptocurrency. The product used a new, untested process that bypassed the need for direct SEC approval, giving Bitwise a powerful first-mover advantage. Within its first week, the fund attracted $420 million, according to LSEG data. Analysts at JPMorgan predict that altcoin ETFs could attract up to $14 billion in just six months, with $6 billion flowing into Solana-related products.
“We do like firsts at Bitwise,” said Matt Hougan, the firm’s Chief Investment Officer. “We are following the rules,” he added. The SEC has not commented on the matter due to the ongoing U.S. government shutdown.
Industry Scramble and Competitive Fallout
Bitwise’s maneuver has reset the playbook for other asset managers. Grayscale Investments quickly followed by converting its private Solana fund into an ETF using the same method. VanEck, Fidelity, and Invesco have also adjusted filings to pursue similar altcoin ETF launches, including products tied to Ripple’s XRP.
For many issuers, the stakes are high. In an industry where timing defines success, being the first to market can mean capturing millions in fees. Analysts point to the ProShares Bitcoin ETF, which gained approval just days ahead of rivals in 2021 and still dominates with $2.8 billion in assets, compared to only $40 million for its nearest competitor.
“The stakes are high for anyone who can seize first-mover advantage,” said Ben Slavin of BNY Mellon, noting that even a single day’s lead can make or break market dominance.
A Regulatory Loophole and a Perfect Storm
The SEC’s mid-September rule change allowed exchanges to adopt generic listing standards for crypto ETFs, streamlining approval. However, with a looming government shutdown, many issuers hesitated to move forward. On October 1, the SEC clarified that issuers could proceed while the agency was closed if they warned investors that their product would automatically become effective after 20 days — but at their own risk.
While Cboe Global Markets advised waiting, the New York Stock Exchange (NYSE) was open to proceeding. Bitwise quickly shifted its ETF listing from Cboe to NYSE, enabling it to launch trading on October 28. Bitwise said it was crucial to list BSOL “on the world’s largest and most experienced ETP venue.”
On the same day, Canary Capital launched new ETFs for Litecoin and Hedera using a similar route on the Nasdaq Stock Market. According to Thomas Erdosi of CF Benchmarks, a mix of “unique circumstances” gave certain issuers the confidence to move ahead.
This staggered rollout contrasts with the blanket approvals previously used for Bitcoin and Ethereum ETFs, marking a new phase in crypto ETF regulation. While some issuers criticized the Solana ETF process as chaotic, others argued Bitwise simply played by the rules and acted fast.
As one industry insider put it: “If you don’t move, you lose the opportunity to win.”
