Grayscale Enters the Competitive Solana ETF Market

On Tuesday, Grayscale Investments introduced its Solana Trust ETF (GSOL) on NYSE Arca, making it the first staking-related product from the firm to conform to new SEC-approved generic listing standards. This launch heightens the competition in the emerging Solana ETF space, where Bitwise's initial product has already gained $69.5 million on its first day.

Key Takeaways

Grayscale has entered the Solana ETF market with its Solana Trust ETF (GSOL).
The new ETF carries a 0.35% expense ratio and focuses on staking rewards.
Bitwise's Solana ETF (BSOL) had substantial initial success with $69.5 million in inflows on its debut.
Regulatory momentum is building for the acceptance of more Solana-related financial products.
The competition could redefine institutional investment dynamics within the blockchain ecosystem.

With GSOL, Grayscale broadens its portfolio beyond Bitcoin and Ethereum, allowing investors to engage with Solana's proof-of-stake blockchain through a well-known exchange-traded format. GSOL now joins Bitwise’s BSOL and Rex-Osprey’s SSK as the third Solana ETF available on U.S. exchanges.

Grayscale’s Staking-Enabled ETF Structure

GSOL has a 0.35% expense ratio and currently holds 525,387 SOL tokens, with 74.89% of these tokens staked to earn network rewards. Grayscale aims to distribute 77% of total staking rewards to investors on a net basis, which could result in annual returns of 5-6%, given historical Solana staking yields of 6-8%.

Initially launched as a private trust in 2021, GSOL became publicly listed on OTCQX in 2023 and began staking in October 2025. Inkoo Kang, Grayscale's Senior Vice President of ETFs, emphasized the importance of integrating digital assets into “modern portfolios” alongside traditional stocks and bonds. Kristin Smith, President of Solana Policy Institute, noted that staking ETPs enable investors to help secure the network, foster developer innovation, and earn rewards on a leading asset in modern finance.

However, GSOL is not registered under the Investment Company Act of 1940, which means it does not have the same regulatory protections as conventional ETFs and mutual funds. Grayscale asserts that GSOL offers indirect exposure to Solana and comes with significant risks, including the possibility of losing principal.

Bitwise Secures Early Success in Solana ETF Inflows

On its debut, Bitwise's Solana ETF attracted $69.5 million in investments, a result that was nearly six times more than the $12 million raised by Rex-Osprey's competing ETF. BSOL fully stakes its SOL tokens in-house to provide investors with the complete network yield, charging a management fee of 0.20%—waived for the first three months.

Matt Hougan, the Chief Investment Officer at Bitwise, linked institutional interest to Solana’s leadership in on-chain revenue generation, stating, “Institutional investors love ETFs, and they love revenue.” Rex-Osprey's SSK adopts a different strategy, holding 54% of its assets in direct Solana, 43.5% in a Swiss-listed CoinShares ETP, and the balance in JitoSOL and cash, with monthly staking rewards classified as return of capital for taxation.

Despite the enthusiasm surrounding ETFs, the market is cautious about short-term price movements. Traders on Polymarket estimate that Solana has only a 28% chance of hitting a new all-time high before 2026, with SOL currently trading at $200, up nearly 1% over the past 24 hours.

Solana ETF Race Heats Up as Grayscale Joins Bitwise on Wall Street

Solana Aims to Compete with Ethereum for Institutional Adoption

Maria Carola, CEO of StealthEX, discussed this pivotal moment in the battle for Layer 1 blockchain supremacy during an interview with Cryptonews. She remarked, “The launch of a spot ETF on Solana is a signal that has broken out in the protracted battle for dominance in the Layer 1 blockchain space.”

Carola highlighted that institutional investors are now being encouraged to see Solana as a standalone macro asset. She predicts that $3 billion in ETF inflows over the next 12-18 months will rely on Solana continuing its momentum in decentralized finance (DeFi) and maintaining network stability. While Solana boasts advantages in speed and scalability, she acknowledged that Ethereum holds its lead due to stability, institutional credibility, and integration into the global financial ecosystem.

At present, Ethereum has over $60 billion locked in DeFi, supported by a mature staking ecosystem that provides the predictability that institutional investors seek. However, Carola proposes a coexistence model where “Ethereum serves as the underlying trust and settlement layer in the on-chain economy, while Solana becomes its high-performance execution engine.” If projected ETF inflows materialize by the end of 2025, she believes that “Solana could be the first blockchain since Ethereum to breach the institutional glass ceiling.”

Growing Regulatory Support for Multiple Blockchains

The Solana ETF surge follows Hong Kong’s recent approval of a SOL spot fund by China Asset Management, which began trading on October 27 with a minimum investment requirement of $100. This product charges a 0.99% management fee and a 1.99% total expense ratio, signifying that Solana is the third cryptocurrency, following Bitcoin and Ethereum, to secure spot ETF approval in the region.

Several U.S. issuers, including VanEck, Canary Capital, Franklin Templeton, Fidelity, and CoinShares, have also received the green light for their Solana ETF proposals. Additionally, Bloomberg analyst Eric Balchunas has confirmed that the SEC is anticipating the approval of the first ETFs for Hedera and Litecoin, with listing notices for Canary’s HBAR and LTC products set for October 28.