Grayscale Moves Closer to Launching a Spot Solana ETF

The effort to bring Solana ($SOL) into mainstream finance is moving forward quickly. Grayscale Investments has taken another step toward launching a spot Solana exchange-traded fund (ETF) in the United States. 

The company has submitted a new registration document to the Securities and Exchange Commission (SEC), outlining how the fund will operate once approved.

According to the new S-1 filing, Grayscale plans to charge a management fee of 0.35%, signaling that it wants to keep costs competitive as more asset managers enter the crypto ETF market. 

Once approved, the ETF will trade on NYSE Arca under the ticker GSOL, and it will be renamed the Grayscale Solana Trust ETF. For now, the fund still operates under its current name, the Grayscale Solana Trust (SOL), which is similar to how the company structured its earlier single-asset funds for Bitcoin and Ethereum.

Unlike futures-based crypto ETFs, Grayscale’s proposed Solana fund will directly hold SOL tokens. This means investors will get exposure to Solana’s market price without needing to deal with crypto custody or complex financial instruments. 

Grayscale’s filing explains that the ETF will track Solana’s price on a one-to-one basis and will not use leverage, derivatives, or any high-risk trading strategies.

At launch, the fund will use cash-based creations and redemptions, allowing investors to buy or sell ETF shares using cash instead of digital assets. Grayscale said it plans to switch to in-kind transactions later, where market participants can exchange Solana directly, once regulators allow it.

The filing also lists several major financial partners involved in the ETF’s setup. The Bank of New York Mellon will act as the transfer agent and handle administrative operations, while Coinbase Custody Trust Company will safeguard the ETF’s Solana holdings. This structure mirrors the setup used for Grayscale’s other crypto products.

Listing GSOL on a national exchange would be a big shift for the company and for Solana investors. The Grayscale Solana Trust currently trades on the OTCQX market, which limits liquidity and access. Moving to NYSE Arca would open the door to both institutional and retail investors, offering a regulated way to invest in Solana for the first time.

“The launch of a Solana ETF would give traditional investors a simple way to gain exposure to one of the most active blockchains,” said one analyst. “It’s another sign that crypto investing is expanding beyond Bitcoin and Ethereum.”

Inside Grayscale’s Solana Trust and Its Operations

Grayscale’s new filing gives a closer look at how the Solana Trust is structured and what it aims to achieve. The Delaware-based trust issues shares that represent fractional ownership of its underlying Solana holdings. 

Each basket includes 10,000 shares, which can be created or redeemed by authorized participants. The main goal is to track Solana’s market price as closely as possible, with adjustments only for management fees and operational costs.

The ETF will rely on several well-known financial partners to manage different functions. Coinbase Custody will act as the main custodian, with Anchorage Digital Bank serving as an additional one. 

The Bank of New York Mellon will handle transfer and administrative duties. Davis Polk & Wardwell will serve as tax counsel, and Foreside Fund Services will oversee marketing and compliance.

One of the most notable updates is that Grayscale has introduced Solana staking within the trust. This feature allows investors to benefit from staking rewards through traditional brokerage accounts. It’s a new way for investors to earn potential yields from Solana’s proof-of-stake network without directly managing the process themselves.

However, Grayscale also warned about the risks associated with staking. In its filing, the company noted that validators could face technical issues, losses, or reduced rewards, which might affect the network’s overall stability.

“The staking feature offers investors more opportunities,” the document said, “but it also carries operational risks tied to validator performance.”

The sponsor fee for the ETF will be 0.35%, payable in SOL. At the moment, Grayscale does not plan to waive the fee, though it mentioned that adjustments could be made later depending on competition and costs.

The Solana ETF aligns with Grayscale’s broader goal of converting its digital asset trusts into fully regulated ETFs once market conditions allow. This approach mirrors what the company did with its Bitcoin and Ethereum trusts, which became some of the most recognized crypto investment products in traditional markets.

By moving forward with a Solana ETF, Grayscale is preparing to tap into growing institutional interest in alternative blockchain networks. Solana has gained attention for its fast transaction speeds and active developer community, making it a key player in decentralized finance (DeFi), gaming, and other Web3 applications.

Competition, Market Reactions and Analyst Expectations

Grayscale isn’t the only firm aiming to launch a Solana ETF. Bitwise Asset Management has filed its own proposal, which also includes staking features and focuses on cost efficiency. 

Bitwise recently updated its SEC filing to include a management fee of 0.20%, one of the lowest in the market, along with a temporary fee waiver until the fund reaches $1 billion in assets.

Bloomberg analysts, James Seyffart and Eric Balchunas, said that such pricing moves show “aggressive competition for early investor inflows.” With multiple companies racing to launch the first Solana ETF, fee structures are becoming an important factor in attracting investors.

As of now, Solana (SOL) trades near $221, down about 2.9% over the last 24 hours. Technical analysts are closely watching the $217 support level, which could determine Solana’s short-term direction. 

Market analyst, Ali Martinez, commented that a bounce from this level could form a “W-shaped” recovery, with possible targets at $226 and $236. However, if the price drops below $217, it could slide further to around $212.

While excitement is building around the potential approval of Solana ETFs, JPMorgan analysts are more cautious. The bank expects that Solana ETFs could attract around $1.5 billion in their first year, far below the inflows seen in Bitcoin and Ethereum funds. They believe the market’s reaction might be more muted this time.

JPMorgan pointed to the sharp drop in the Grayscale Solana Trust (GSOL) premium, which has fallen from over 750% to nearly zero. According to the analysts, this suggests that investors may have already priced in the likelihood of SEC approval.

“The strong chance of approval for Solana spot ETFs is supported by the existence of a Solana futures contract at CME,” the analysts said. “But expectations should remain realistic, as early inflows are unlikely to match Bitcoin’s initial surge.”

The SEC is expected to make its decision before the October 10 deadline. If approved, Solana would join Bitcoin and Ethereum as the only cryptocurrencies with spot ETFs in the U.S. market. That milestone would mark another step toward greater acceptance of digital assets within traditional finance.

For Grayscale, this could be a key moment in expanding its lineup of blockchain-based products. For investors, it could offer a simpler way to gain exposure to one of the fastest-growing crypto ecosystems without directly buying or managing digital assets.

As competition grows between major players like Grayscale and Bitwise, analysts believe that the focus will shift toward three main factors – cost, convenience, and credibility. In a rapidly evolving ETF market, these elements could determine which provider ultimately dominates Solana’s entry into the world of regulated finance.