TLDR
- Bitwise Solana ETF offers a competitive 0.20% fee and staking rewards.
- The Bitwise Solana ETF is 100% physically backed by Solana’s spot assets.
- Bitwise waives fees for the first three months or until $1B in assets.
- Bitwise Solana ETF awaits SEC approval to launch by October 16.
Bitwise is making waves in the cryptocurrency investment world with its proposed Solana ETF, set to launch this week. The firm has filed an updated application with the U.S. Securities and Exchange Commission (SEC), introducing a staking feature and a low management fee of just 0.20%. With this move, Bitwise aims to position itself as a leader in the growing market for crypto exchange-traded funds (ETFs), offering a competitive product to attract potential investors.
Bitwise Solana Staking ETF Update
Bitwise has recently amended its application for the Solana ETF, now named the “Bitwise Solana Staking ETF.” This adjustment includes the addition of staking capabilities, allowing investors to earn rewards from Solana’s proof-of-stake blockchain.
The ETF will also have a low management fee of 0.20%, which is seen as a strategic move in an increasingly competitive market. This fee is within the typical range for most crypto ETFs, which often fall between 0.15% and 0.25%.
The firm has made it clear that the ETF will be 100% physically backed by Solana’s spot assets, meaning that the fund will hold actual Solana tokens rather than relying on futures contracts. This structure contrasts with other crypto ETFs that have faced challenges with tracking issues. “The low fees and physical backing make it a strong contender,” said ETF analyst Eric Balchunas, referring to Bitwise’s strategy.
A Competitive Strategy for Inflows
The introduction of a 0.20% management fee is a move designed to attract investors quickly. Historically, low fees have been associated with strong inflows into funds, which has been a key consideration for ETF issuers. By setting a competitive fee from the outset, Bitwise is signaling its intent to capture market share early, ahead of other potential Solana ETF issuers.
Bitwise’s approach contrasts with that of other firms that have launched crypto ETFs with higher fees. For example, the REX-Osprey Solana Staking ETF, which debuted earlier this year, has a management fee of 0.75%.
While this fund gained $12 million in inflows on its first day, it has faced tracking issues, trailing Solana’s spot price by as much as 12%. Bitwise’s Solana ETF aims to address such concerns with its more favorable structure and lower cost, which could make it more attractive to investors.
Waiving Fees to Boost Early Adoption
In addition to the competitive management fee, Bitwise is also offering an attractive incentive for early investors. The firm has waived the fee for the first three months or until the assets under management (AuM) reach $1 billion. This move is designed to encourage initial investment and jumpstart the fund’s growth.
Bitwise’s decision to waive fees for the first few months is a clear effort to ensure strong early adoption. It mirrors tactics used by other ETF issuers, like VanEck, which waived its fees for its Bitcoin ETF to boost interest. By offering a fee waiver, Bitwise is making its Solana Staking ETF more appealing, especially for large institutional investors looking to enter the market.
Awaiting SEC Approval
Bitwise’s amended application is still subject to approval by the SEC, with the final deadline for a decision set for October 16. If the SEC approves the ETF, it could quickly begin trading on the CBOE BZX Exchange.
The firm has already secured key partnerships, including with Coinbase Custody for staking custody services and with Attestant for delegated staking. With all the necessary filings in place, the Bitwise Solana Staking ETF is now one step closer to launch.
As the crypto ETF market grows, the competition among issuers is expected to intensify. With its low fees, staking features, and solid backing by Solana’s spot assets, Bitwise is positioning itself to capture significant market share if the SEC grants approval in the coming days.
