Grayscale Investments has taken another step towards expanding its cryptocurrency exchange-traded fund (ETF) offerings by filing a new S-1 registration statement with the US Securities and Exchange Commission (SEC).
The application seeks approval to convert the firm’s existing Grayscale Solana Trust (GSOL) into a publicly traded spot Solana ETF, to be listed on NYSE Arca.
The fund, which currently trades as an over-the-counter (OTC) product under the ticker GSOL, manages more than $61 million in assets. Shares of GSOL are valued at $9.75, linked to the trust’s net asset value of approximately 0.073 $SOL per share.
The trust has experienced a surge in trading activity since November 2024, following increased interest from mainstream investors amid broader enthusiasm for the crypto market.
Despite the filing, Grayscale has not yet set a launch date for the new ETF. The move is contingent on regulatory approval from the SEC, which is yet to issue a response to the 19b-4 form submitted by NYSE Arca on Grayscale’s behalf in December 2024.
Both the S-1 and 19b-4 forms must be approved before the ETF can begin trading on the open market.
“As of the date of this filing, the 19b-4 Application has not been approved by the SEC. The Trust makes no representation as to when or if such approval will be obtained. The Trust will not seek effectiveness of this registration statement and no offering of Shares hereunder will take place unless and until such approval is obtained”, Grayscale stated in the filing.
The proposed ETF would hold actual Solana ($SOL) tokens, distinguishing it from futures-based products. Coinbase has been selected as the ETF’s prime broker and custodian, while Bank of New York Mellon will act as transfer agent and administrator.
Initially, all share creation and redemption will be handled through cash orders, though the filing leaves the possibility of in-kind transactions open for the future.
Grayscale has confirmed the ETF will not engage in staking or distribute tokens received through forks or airdrops. “No action will be taken pursuant to which any portion of the Trust’s $SOL becomes subject to the Solana proof-of-stake validation”, the filing clarified.
Solana ETFs attract institutional attention
Grayscale’s latest filing comes at a time of heightened competition among asset managers seeking approval for Solana-linked ETFs.
Other major players, including Fidelity, VanEck, Bitwise, 21Shares, and Canary Capital, have also submitted applications for similar products.
So far, only two Solana ETFs—SOLT and SOLV, issued by Volatility Shares—have received approval and are currently building up a base of traders.
The Grayscale Solana Trust is the only product attempting to transition from an existing investment vehicle into a publicly traded ETF. This offers a potential advantage, as the trust already has established reserves and a trader base.
Grayscale, a long-time player in the crypto space, also acts as a custodian for various digital assets, bolstering investor confidence.
The proposed ETF will track the CoinDesk Solana Price Index (SLX) and is designed to mirror the price movement of the underlying $SOL asset. It also aligns with the SEC’s current preferences, avoiding staking mechanisms, which have historically been a point of contention.
Under former SEC Chair, Gary Gensler, proof-of-stake tokens were considered possible securities, leading many ETF applicants—including Grayscale and Fidelity—to exclude staking from their applications.
Grayscale’s move follows the SEC’s acknowledgment of Fidelity’s own application for a spot Solana ETF just a day earlier. Bloomberg analysts have pointed to the SEC’s new leadership, believed to be more supportive of crypto, as a positive sign.
This change in regulatory tone comes under President Trump’s administration, which has recently adopted a more crypto-friendly stance.
Despite growing interest from institutions, $SOL’s price has remained largely unchanged following the news, trading around $114.63. The token has been under pressure recently, dropping from a high of $131.11 on April 2 to a 13-month low near $112.
This comes in the wake of broader market turmoil sparked by President Trump’s announcement of global tariffs, which triggered the steepest decline in the S&P 500 in four years.
Analysts expect that a decision from the SEC on Grayscale’s application could arrive by October 2025. Optimistic forecasts suggest that at least one Solana ETF might gain approval before the end of the year.
Whale activity and market conditions add pressure
As Grayscale’s ETF efforts gain traction, Solana’s price action continues to reflect turbulence in the wider cryptocurrency market. A significant amount of $SOL has recently been unstaked and moved to exchanges by large holders, commonly referred to as “whales”.
This activity has raised concerns among investors and contributed to a downward pressure on the token’s value.
On 4 April, four whale addresses unstaked a combined 1.79 million $SOL tokens, initially staked back in April 2021 when they were worth around $37.7 million.
At the time of the unlock, the tokens had appreciated to approximately $206 million, marking a 446% gain. According to Arkham Intelligence, this was the largest single-day unlock of staked $SOL to date.
Following the unlock, these whales began offloading their holdings. Data shows that over 420,000 $SOL tokens—valued at around $50 million—have already been sold. One address, labelled ‘HUJBzd’, transferred roughly 258,000 tokens worth more than $30 million.
Three other addresses also made sizable transfers: ‘BnwZvG’ offloaded $9.47 million, ‘8rWuQ5’ moved $3.53 million, and ‘2UhUo1’ transferred about $3 million in $SOL.
“The large-scale unstaking and immediate transfers to exchanges suggest growing bearish sentiment, These moves typically precede further price drops”, said a blockchain analyst from Lookonchain.
The market had already experienced similar events earlier in the year. On 4 March, the bankrupt exchange FTX and its trading firm Alameda Research unstaked over 3 million $SOL tokens worth around $431 million, continuing a sell-off that began in late 2023.
Since November of that year, FTX has sold nearly 8 million $SOL tokens for a total of approximately $986 million.
At the time of writing, Solana is trading at $116, reflecting a 12% decline over the past week. Over the last 30 days, the token has dropped by 15%, as macroeconomic uncertainties and large token movements contribute to increased volatility.
Despite these challenges, some analysts remain hopeful. Brandon Hong, a well-known crypto market commentator, recently posted on X: “SOL is about to have its biggest breakout ever”. He suggested that Solana might be on the verge of escaping its 400-day trading range, encouraging investors to act decisively.
While opinions on Solana’s short-term direction remain split, the next few months could be pivotal. ETF applications, whale behaviour, and regulatory decisions will all play critical roles in determining the token’s performance in an increasingly uncertain economic environment.
