VanEck Introduces Third Solana Staking ETF in the US Amid Surge of Altcoin Funds

VanEck has launched the third US exchange-traded fund (ETF) that offers Solana staking, contributing to the growing interest in altcoin products entering the public markets.

Key Takeaways

VanEck has launched its third Solana staking ETF, VSOL, joining Bitwise and Grayscale as investments in Solana-related funds increase.
The VSOL ETF provides staking rewards and a temporary waiver of its management fees, enhancing its competitive edge in the market.
Fidelity is rolling out its Solana ETF next, and several Dogecoin ETF filings are close to launching.

The VanEck Solana ETF (VSOL) debuted on Monday, following similar staking-enabled Solana ETFs from Bitwise and Grayscale that have collectively raised over $380 million since they were introduced in late October.

VanEck Launches Third US Solana Staking ETF as Altcoin Funds Surge

Fee Waiver to Capture Market Share

VSOL allows investors to earn staking rewards on Solana, enabling them to gain yield while holding the asset within the ETF framework.

To attract investors quickly, VanEck is eliminating its 0.3% management fee until February 17, or until the fund reaches $1 billion in assets.

This launch is part of a trend where issuers are quickly bringing new cryptocurrency products to market, prompted by the SEC’s recent rule modifications that simplify the approval process and eliminate the necessity for individual reviews.

Bloomberg ETF analyst Eric Balchunas has observed that the number of offerings is rapidly expanding, with Fidelity’s Solana ETF (FSOL) scheduled to launch on Tuesday.

FSOL will enter a competitive landscape where most funds charge around 0.25% in management fees, with Fidelity being the largest asset manager currently operating in this sector. Notably, BlackRock has not yet participated in the Solana market.

More altcoin ETFs are poised to emerge following the momentum from Solana. Grayscale’s Dogecoin ETF could be approved for launch as soon as November 24, after an updated filing triggered a 20-day window for the product to become active, provided the SEC does not intervene.

If approved, it would be the first US ETF to directly hold Dogecoin. The only existing DOGE-related ETF, issued by REX Shares and Osprey Funds in September, is restricted to offshore subsidiary holdings due to constraints under the Investment Company Act of 1940.

Bitwise also announced a filing that may lead to a late-November launch of its own Dogecoin ETF.

The increase in altcoin ETFs signifies rising competition among issuers seeking to draw investments beyond Bitcoin and Ether as the market diversifies.

Outflows from Digital Asset Products Reach $2 Billion

Recent reports indicate that digital asset investment products experienced their largest weekly outflows since February, totaling $2 billion last week.

This sell-off marks the third straight week of withdrawals, bringing the total outflows during this period to $3.2 billion.

The downturn can be attributed to significant price drops across major cryptocurrencies, causing total assets under management in digital asset exchange-traded products (ETPs) to decline by 27%, from an early-October high of $264 billion to $191 billion.

Analysts have identified ongoing uncertainty in monetary policy and aggressive selling by crypto investors as key factors contributing to this market decline.

Most of the outflows came from US-based products, which saw $1.97 billion exit the market. Switzerland and Hong Kong also recorded outflows of $39.9 million and $12.3 million, respectively.