US Solana Staking ETFs Launch, Paving Way for First Non-Bitcoin, Non-Ethereum Crypto Funds
A New Era for Crypto ETFs Begins: Solana, Litecoin, and Hedera Funds Go Live in US Markets
The United States financial markets are poised for a historic expansion as the first wave of non-Bitcoin, non-Ethereum spot crypto exchange-traded funds (ETFs) begins trading. On October 28, a series of altcoin ETFs, including a groundbreaking staking product for Solana, received regulatory clearance to launch, marking a significant milestone in the institutional adoption of digital assets. This development signals a potential broadening of the crypto ETF landscape beyond the two largest cryptocurrencies and tests the depth of institutional demand for a wider array of digital assets.
Breaking Down the Landmark ETF Launches
The initial catalyst for this new phase was the confirmation from Bloomberg senior ETF analyst Eric Balchunas that the NYSE and Nasdaq had posted listing notices for the Bitwise Solana Staking ETF (BSOL). Shortly after this observation, Bitwise confirmed that BSOL would indeed begin trading on October 28. This launch represents a pivotal moment, not just for Solana but for the entire altcoin market, as it is the first such product to gain access to US equity markets.
Simultaneously, other major issuers are moving forward with their own products. Grayscale’s Solana ETF is scheduled to convert and begin trading the following day. In a separate but related development, Canary Capital CEO Steven McClurg informed journalist Eleanor Terrett that his firm’s spot HBAR (Hedera) and LTC (Litecoin) ETFs are effective and will also commence trading on Nasdaq. McClurg stated, “Litecoin and Hedera are the next two token ETFs to go effective after Ethereum. We look forward to launching tomorrow.” The first indication of these launches came from Multicoin Capital partner Kyle Samani, who disclosed the Bitwise SOL staking ETF launch date in a since-deleted post on October 27.
The Significance of a Staking-Enabled Solana ETF
A critical differentiator in this new batch of ETFs is the inclusion of a staking component, particularly for the Solana products. This feature sets them apart from the spot Ethereum ETFs that launched in July 2024, which did not include staking due to regulatory concerns at the time. The ability for an ETF to participate in staking—the process of actively participating in transaction validation on a proof-of-stake blockchain—provides a potential yield component for investors. This transforms the product from a simple passive holding vehicle into one that can generate rewards, mirroring the activity of direct cryptocurrency ownership more closely.
This development validates months of operational groundwork by infrastructure providers in the crypto space. Thomas Uhm, chief commercial officer at Jito, emphasized this point, stating, “We’ve been sitting on the precipice of this moment, and I’m immensely proud we’re finally here. The approval of staked Solana ETFs is a significant step for institutional access to crypto.” He added that this achievement validates extensive infrastructure work, including integration with qualified custodians, building liquidity across exchanges and over-the-counter (OTC) markets, and addressing complex regulatory, tax, and accounting issues that institutions face.
Jito’s role is particularly notable as its JitoSOL liquid staking token (LST) operates inside REX’s SSK product and is the sole Solana LST with a full LST ETF application from VanEck. Uhm highlighted the importance of relationship-building, noting they have worked with "the largest authorized participants, liquidity providers, and market makers in the world." He framed the approval not as a conclusion but as a starting point, mentioning ongoing work with "tier 1" investment banks and major hedge funds on related products.
Comparing the New Contenders: SOL, LTC, and HBAR
The launch of these three distinct ETFs offers investors exposure to cryptocurrencies with different technological propositions and market roles.
- Solana (SOL): Often positioned as a high-performance blockchain for decentralized applications and cryptocurrencies, Solana is designed to process transactions rapidly and at low cost. The approval of its ETF, especially one with a staking feature, acknowledges its status as a leading smart contract platform beyond Ethereum.
- Litecoin (LTC): As one of the oldest cryptocurrencies, often referred to as the "silver to Bitcoin's gold," Litecoin represents a more established digital asset focused on payments. Its ETF provides exposure to a cryptocurrency with a long track record and a different use case than smart contract platforms.
- Hedera (HBAR): Hedera Hashgraph utilizes a different distributed ledger technology than traditional blockchains, aiming to offer high throughput and security for enterprise applications. An HBAR ETF introduces a unique technological approach to the public markets.
The simultaneous launch of these products will test investor appetite for these varied narratives and technological foundations within a regulated wrapper.
The Regulatory Pathway and Market Context
The approval of these ETFs on October 28 follows months of issuer applications and review by the U.S. Securities and Exchange Commission (SEC). The process was not without uncertainty; as Eric Balchunas noted regarding the Bitwise filing, “Assuming there’s not some last-minute SEC intervention, looks like this is happening.” The fact that these products have proceeded to launch indicates a significant, albeit cautious, step forward in the regulatory acceptance of a broader crypto asset class.
This expansion occurs in a market context that has been dominated by Bitcoin and Ethereum. The success or failure of these new funds will be closely watched as an indicator of whether institutional demand extends beyond the two largest cryptocurrencies. A key question for market observers is whether these regulated products can absorb supply and facilitate investment without triggering the high volatility that has historically characterized altcoin rallies.
Strategic Conclusion: A Watershed Moment for Institutional Crypto Access
The launch of spot Solana, Litecoin, and Hedera ETFs represents a watershed moment for the digital asset industry. It formally ends the duopoly of Bitcoin and Ethereum in the US-regulated ETF space and opens the door for a more diverse set of cryptocurrencies to gain mainstream financial exposure. The inclusion of staking functionality in the Solana ETF further bridges the gap between traditional finance products and the native functionality of blockchain networks.
For investors and market participants, this development underscores the accelerating integration of cryptocurrency into conventional financial infrastructure. The meticulous work by firms like Jito in building relationships with authorized participants, liquidity providers, and market makers demonstrates the level of sophistication now required to bring these complex products to market.
Looking ahead, readers should monitor several key factors:
- Trading Volumes: The initial and sustained trading volumes for BSOL, GBSC (Grayscale's proposed ticker), and the LTC/HBAR ETFs will be the most direct measure of institutional and retail demand.
- Regulatory Follow-Through: The SEC's posture following these launches will be critical for future applications for other altcoin ETFs.
- Market Impact: Observers will watch to see if these ETFs act as a catalyst for rotation into altcoins or if they simply absorb existing demand without significantly impacting underlying market dynamics.
The arrival of these funds is less of a finish line and more of a starting gate. It validates years of development in alternative Layer 1 blockchains and sets the stage for a new, more complex phase of competition and growth within the cryptocurrency ecosystem. The success of this first wave will likely determine the pace at which other digital assets can make their way into the world's largest financial market.