Original author: Cathy, Plainspoken Blockchain
At the end of October 2025, the crypto world witnessed a historic moment. Solana (SOL) broke through the final regulatory barrier, becoming the third crypto asset after Bitcoin and Ethereum to receive approval for exchange-traded products (ETP) in the United States.
This is not just another boring news about “another ETF approval.” Its approval process was dramatic, its product design is filled with intrigue, and the market reaction it triggered left countless traders astonished. For those of us in the crypto industry, the arrival of the Solana ETF is not the end of a story, but the beginning of one filled with “insider information” and new opportunities.
01 Wall Street “Civil War”
The “birth” of the Solana ETF is quite unusual. It did not come about through public votes and enthusiastic press releases from the SEC (U.S. Securities and Exchange Commission), but occurred during the chaotic period of the U.S. federal government “shutdown.”
During this unique window period where the functions of regulatory agencies are limited, two asset management giants—Bitwise and Grayscale—have demonstrated remarkable legal acuity. They took advantage of the guidelines issued by the SEC during this period, allowing S-1 registration statements to automatically take effect without a “delayed amendment.”
- October 28: Bitwise Solana Staking ETF ( code: BSOL) first listed on the New York Stock Exchange (NYSE).
- October 29: Grayscale Solana Trust ( code: GSOL) subsequently successfully converted its trust product into an ETP.
This “regulatory raid” has opened a compliant investment channel for Solana for trillions of dollars in institutional capital and retail retirement accounts in the United States.
The data from the first week can be described as “heavyweight”, according to the total of American Solana ETPs:
- Cumulative net inflow in the first week: $199.92 million
- The total assets under management (AUM) have rapidly exceeded the 500 million dollar mark.
But the “average” conceals the truth. Behind this nearly 200 million dollar massive inflow is an extremely brutal, winner-takes-all “Wall Street civil war”.
- Winner: Bitwise (BSOL), with a net inflow of 197 million USD in the first week, total assets under management ( including seed funding ): approximately 420 million USD.
- Loser: Grayscale (GSOL), net inflow in the first week: 2.18 million USD, total assets under management ( including converted assets ): approximately 101 million USD.
You read that right. Among the new influx of funds, Bitwise's BSOL almost captured 99% of the market share. What seemed like a level playing field actually determined the winner on the very first day.
Why is it so one-sided? The answer lies in the BSOL textbook-like “Three Elements of Blitzkrieg”:
Timing (One day ahead, win it all): BSOL will be listed on October 28 (Tuesday), while GSOL will only complete the conversion on the 29th (Wednesday). In the liquidity-driven world of ETFs, Bloomberg analysts pointed out, “Being just one day behind is actually huge. It makes competition much more difficult.” BSOL has successfully defined itself as the “authentic” Solana ETF.
Fees (0.20% vs 0.35%): The management fee for BSOL is only 0.20%, and it is completely free for the first three months or until AUM reaches $1 billion. In contrast, the rate for GSOL is as high as 0.35%. For budget-conscious institutional investors, this 0.15% annual difference is something they cannot ignore.
Product (100% vs 77%): This is the most critical “secret weapon”. BSOL promises in its prospectus to use 100% of its SOL assets for staking. In contrast, GSOL only commits to staking 77% of its assets.
For those outside the crypto circle, this 23% difference may seem insignificant. But for those in the know, this is precisely what makes the Solana ETF revolutionary.
02 “Earning Interest” ETF
The launch of the Solana ETF is structurally more revolutionary than the Bitcoin ETF.
Bitcoin ETF is just a vault for “digital gold”. You hold it, it does not generate any yield. Solana, on the other hand, is a Proof of Stake (PoS) asset, holding it (and staking) is like owning a “digital real estate” that can continuously generate rental income.
The temptation of “interest-bearing assets”
- Yield Crush: The annualized staking yield (APY) of Solana is between 5% and 7%. This is not only significantly higher than Ethereum's yield of about 2%, but also provides institutional investors with a “unique source of income.”
- Narrative Shift: Bitwise's Chief Investment Officer (CIO) Matt Hougan's summary is straightforward and powerful: “Institutional investors like ETFs, they like income. Solana is the highest income generating among all blockchains. Therefore, institutional investors like Solana ETFs.”
- Nature of the product: By investing in a Bitcoin ETF, you are betting on the price appreciation of “digital gold”. In contrast, by investing in a Solana ETF, you are betting on price appreciation while also obtaining a substantial cash flow (Staking rewards) that is unrelated to traditional bonds and stocks.
The biggest “Easter egg” lies in the SEC's attitude.
When the Ethereum ETF is approved in 2024, the term “staking” will be an absolute taboo. The SEC detests the “securities” attributes that staking may involve, forcing all issuers to delete related clauses overnight.
This time, the SEC quietly “released” them. It tacitly allowed the listing of the two “staking” products, BSOL and GSOL.
This tacit approval marks a significant shift in the SEC's regulatory stance. It opens up a whole new trillion-dollar “yield-generating crypto asset” track for Wall Street. Institutions can now not only purchase cryptocurrencies but also “employ” these cryptocurrencies to work for them (staking for yield) through compliant ETF tools. This fundamentally changes the rules of the game.
03 Why did the price plummet under the “huge positive news”?
As Wall Street cheers for this ETF victory, all the traders watching the candlestick charts are plunged into great confusion:
If the ETF saw inflows of nearly $200 million in the first week, why is the price of SOL plummeting?
Data shows that after the launch of the ETF, the price of SOL not only did not rise but instead experienced a significant pullback. On October 30, the price dropped by 8% in a single day, and at one point pulled back 27% from the recent August high, even falling to around $163, far below the expected $300.
“Increased inflow, falling prices” - this paradoxical phenomenon has caught many off guard. But digging deeper into the data, you will find that this is not a signal of ETF failure, but rather the result of four powerful forces converging:
- “Buy the expectation, sell the fact” (Sell the News): This is the most classic script. A large number of short-term traders who ambushed weeks (or even months) before the ETF approval concentrated their profits at the moment the “news landed.”
- History Repeats (Bitcoin): This is similar to the trend after the Bitcoin ETF launch in January 2024. At that time, the BTC price also experienced stagnation and a decline (approximately -5%), despite strong capital inflows. The real rebound did not begin until a few weeks later, when the selling pressure from “selling the news” was completely absorbed.
- The macro “perfect storm”: The timing of the Solana ETF launch can be described as “hellish difficulty”. It coincides perfectly with the risk-averse wave across the entire cryptocurrency market. During the same period (the week of October 27), Bitcoin ETFs were experiencing massive outflows of funds ranging from $600 million to $946 million, and the market as a whole was “bleeding”.
- Whale sell-off: This is the deadliest strike. On-chain data shows that trading giant Jump Crypto exchanged 1.1 million SOL (worth approximately $205 million) for Bitcoin on October 30th—the second day of BSOL's listing.
Now, let's piece together all the clues:
In a “selling news” atmosphere of heightened emotions, with Bitcoin ETFs bleeding over $600 million in a “perfect storm,” a giant whale dumped $205 million worth of SOL into the market.
In a normal market environment, this is enough to trigger a collapse in the price of SOL.
However, in the last week of October 2025, this massive sell-off of $205 million was almost perfectly absorbed by the new institutional purchases of $199.92 million brought by the Solana ETF (mainly BSOL).
This is the truth: The inflow of funds into the SOL ETF, amidst a bleeding market overall, demonstrates an astonishing “relative strength”. A new batch of institutional investors (ETF buyers) is directly engaging with another batch of traditional institutions (Jump Crypto) that are selling off. This is not only not bearish, but rather a strong long-term bullish signal. This proves that a strong and continuous new institutional buying force has formed.
04 What is the future of Solana ETF?
The ETF has been approved, and the next question on Wall Street is: how much capital can it attract? On this issue, there is a significant divergence between crypto-native companies and traditional financial giants:
- Bullish camp (crypto native): Grayscale's head of research Zach Pandl predicts that Solana ETPs may absorb 5% of the total supply of Solana in the next one to two years, which, at current prices, equates to over $5 billion in capital inflow.
- Cautious Camp (Traditional Finance): The giant JPMorgan appears “out of place”. In a report, they predict that the net inflow of Solana ETF in the first year will be only $1.5 billion.
Why is JPMorgan so conservative? Their reasoning is: “The institutional understanding of Solana is relatively weak,” as well as concerns about the “increasing dominance of Meme coin trading” in its network activities.
JPMorgan's concerns represent a widespread anxiety in traditional finance: is Solana a high-tech financial infrastructure or a “Meme coin casino” filled with speculators?
However, just two days after the ETF was listed, an influx of “new money” completely ended the debate about whether Solana is a “casino or infrastructure.”
On October 30, 2025, global payment giant Western Union announced a major strategic initiative: Western Union has chosen the Solana Blockchain as the issuance network for its new stablecoin — U.S. Dollar Payment Token USDPT — which is planned to launch in the first half of 2026.
Western Union clearly stated in the announcement that the reason for choosing Solana is its “high performance”, “high throughput, low cost, and instant settlement.”
The impact of this news far exceeds that of ETFs. It perfectly answers JPMorgan's questions. You won't build a global remittance network on a “Meme coin casino.” Western Union is betting its future core business on Solana, which is the strongest endorsement of Solana's “financial infrastructure” attributes.
( 05 Summary
The approval of the Solana ETF is not a finish line, but the starting gun for a new era. It clearly demonstrates two parallel tracks of institutional adoption of Solana:
- Financialization Track ) ETF (: Wall Street asset management firms (such as Bitwise) are packaging SOL (token) into a “yield-bearing” financial asset to sell to their institutional clients.
- Infrastructure Track ) Western Union ###: Global enterprises (such as Western Union) are using Solana (network) as a “low-cost” financial infrastructure to build their core business on.
These two tracks will strengthen each other. The adoption of Western Union provides the strongest fundamental support for institutions purchasing ETFs; meanwhile, the large AUM and professional staking brought by ETFs (Bitwise's “New Wall Street” narrative) in turn provide builders like Western Union with a safer and more stable network.
While JPMorgan was still worried about “Mime Coin”, Bitwise and Western Union have already demonstrated through action: Solana is not only the “New Wall Street”, it is also the “new infrastructure” for Wall Street and global payments. The flywheel of financialization and infrastructuralization has already begun to accelerate simultaneously.
Source: Baihua Blockchain
