In a significant move for the crypto investment landscape, several major asset managers—including Bitwise, Canary, and Grayscale—have amended their Solana ETF filings to include staking, following a directive from the U.S. Securities and Exchange Commission (SEC) 2 3. This update could mark a turning point for regulated crypto funds in the U.S., introducing a new way for investors to earn passive income from their ETF holdings.
What’s New: Staking Comes to Solana ETFs
The SEC recently requested that all prospective Solana ETF issuers update their S-1 registration forms, specifically addressing how the funds would handle staking and in-kind redemptions 2 4. In response, Bitwise, Canary, and Grayscale have revised their filings to allow the Solana held in their ETFs to be staked through trusted custodians, such as Coinbase Custody 3. This means that, for the first time, U.S. investors could gain exposure to Solana’s staking rewards directly through a regulated ETF, without needing to manage the technical aspects themselves.
How Staking Works in These ETFs
• Staking Rewards: The updated filings specify that Solana tokens held in the ETF can be staked, generating rewards that are treated as income for the fund. These rewards may be distributed to investors either as additional Solana tokens or as cash, depending on the ETF’s structure.
• Custody and Security: All staking activities are managed by institutional custodians, ensuring that the process remains secure and compliant with regulatory standards.
• Management Fees: Grayscale’s amended filing introduces a 2.5% management fee, reflecting the added complexity and potential yield from staking. While this is higher than traditional ETF fees, it may be justified by the new income stream for investors.
Why This Matters for Investors
This development signals a shift in how crypto ETFs are structured in the U.S. Instead of simply tracking the price of Solana, these funds now offer a yield component, making them more attractive to traditional investors seeking both price exposure and passive income 5. The move could also set a precedent for future crypto ETFs, potentially including other staking-enabled assets.
What’s Next?
Industry analysts suggest that these amendments could accelerate the approval timeline for Solana ETFs, with some expecting a decision from the SEC as soon as July 2 5 4. If approved, these would be among the first U.S. ETFs to offer staking, potentially paving the way for similar products tied to other cryptocurrencies.
