CoinShares Files for Nasdaq Solana Staking ETF
A leading digital asset manager is joining the rush to offer institutional investors direct exposure to Solana’s (SOL) proof-of-stake rewards. CoinShares has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) to launch a Solana-based ETF that will stake a portion of its assets on the blockchain.
Key Features & Considerations
The CoinShares Solana staking ETF, intended for listing on Nasdaq, aims to replicate the yield-earning potential seen in staking operations. A key detail is that the application does not especifically state what percentage of the fund’s SOL holdings will be allocated to staking, presenting investor concerns about exposure levels.
Redemption timing presents a significant operational challenge. Unlike standard ETFs that settle redemptions within one day, withdrawing SOL from the Staking ETF requires waiting several hours to days. This could create a liquidity gap if redemption requests exceed the amount of un-staked SOL. As a prominent analyst noted, “It’s generally understood that you cannot stake 100% of the ETF’s SOL assets and expect to settle redemptions the same day.” Yield potential for staked SOL typically ranges between 7% and 8%, offering a compelling return compared to traditional finance alternatives.
The Race is On
This filing comes amidst a flurry of activity in the staking ETF space. Major players like BlackRock and Fidelity are already moving to incorporate staking capabilities into their existing cryptocurrency exchange-traded products. Competitors mentioned include Grayscale and 21Shares. Invesco Galaxy also recently submitted an application for its own Solana staking ETF. This rapid development mirrors the mainstream acceptance seen with Ethereum ETFs.
Ethereum Dominance & Solana’s Potential
Ethereum staking funds have demonstrated massive institutional appetite since receiving approval under the Investment Company Act of 1940. The benchmark Ethereum staking ETF reached over $27 billion in Assets Under Management (AUM). A similar rapid inflow pattern has started for Solana. The recently-launched Rex-Osprey Solana + Staking ETF started with $137 million in assets and attracted $12 million on launch day, highlighting growing interest despite Solana ETFs currently holding only about 8.7% of the total assets managed by Ethereum-based funds, despite SOL’s larger market capitalization relative to ETH funds.
Risks and Rewards
While proponents argue that staking ETFs provide institutional investors with easier access to yield (“It’s a natural evolution”) and diversified exposure, significant execution risks exist, primarily regarding redemption mechanics. Industry experts believe institutions are attracted by yield opportunities made possible by staking (“the desire for diversified crypto exposures, like with Bitcoin and Ethereum ETFs”) but acknowledge this adds complexity compared to straightforward spot ETFs.
However, potential investors should be aware of the primary risk: redeeming shares quickly becomes difficult if a large portion of the fund’s holdings is staked. The execution risk involves providing standard custody and counterparty risk, with rewards potentially justifying the added complexity. The federal regulator has voiced concerns.
