Wall Street’s Solana Bet Advances As Fidelity Updates Etf Filing

What Happened

Fidelity Investments has filed a pre-effective amendment for its Solana ETF with the Securities and Exchange Commission, moving the registration toward automatic effectiveness.

The filing reveals the fund will stake all its SOL holdings to generate returns exceeding the Fidelity Solana Reference Rate while charging a 0.25% annual fee, fully waived for the first six months after launch.

Just one day later, Grayscale launched its Solana Trust ETF on NYSE Arca, converting a 2021-vintage private trust holding 525,387 SOL tokens.

The fund carries a 0.35% expense ratio and stakes 74.89% of assets, passing 77% of staking rewards to investors on a net basis.

“The launch of a spot ETF on Solana is a signal that has broken out in the protracted battle for dominance in the Layer 1 blockchain space,” she said.

“For the first time, institutional investors are being invited to consider Solana as a standalone macro asset.“

Market Context

This update pushes Fidelity into a rapidly expanding Solana ETF market, which has already seen three products debut on U.S. exchanges, capturing combined first-day inflows exceeding $81 million.

To support this dual-settlement approach, Fidelity has secured trading agreements with counterparties, including Cumberland DRW, Jane Street Capital affiliates, and Virtu Americas, to facilitate cash creations.

The registration warns that a definitive security classification could trigger immediate material impact on SOL’s trading value and potentially force the fund’s liquidation.

Bitwise Dominates Early Market

While Fidelity prepares to enter, early movers have already claimed significant market share.

Bitwise’s Solana ETF captured $69.5 million on its October 28 debut, nearly six times the $12 million raised by Rex-Osprey’s competing product.

The fund distributes monthly staking rewards, which are treated as a return of capital for tax purposes, while charging a 0.75% expense ratio.

“Solana’s story is one of speed, scalability, and engineering precision, but for many market participants, it remains a symbol of short-term liquidity cycles and the fleeting hype of meme tokens,” she said. “An ETF alone won’t change this perception overnight.“

Why It Matters

Staking rewards will be subject to a 15% fee split among the sponsor, custodians, and operators, with the Trust expected to unstake SOL within two days when needed for redemptions.

Despite the ambitious structure, the filing acknowledges substantial regulatory risk, noting the SEC has previously classified SOL as a security in enforcement actions. However, some cases have been dismissed or settled.

Details

Fidelity Structures Aggressive Staking Strategy

The Fidelity Solana Fund will stake up to 100% of its SOL tokens through custodians Anchorage Digital, BitGo, and Coinbase Custody, with node operators including Coinbase Crypto Services and Figment.

The fund will trade under ticker FSOL on an undisclosed exchange, offering creation and redemption baskets of 25,000 shares settled in either SOL or cash.

The Bitwise Solana Fund stakes 100% of holdings in-house to deliver the network’s full yield while charging a 0.20% management fee, waived for three months.

Meanwhile, Rex-Osprey’s SSK employs a hybrid structure holding 54% in direct Solana, 43.5% in a Swiss-listed CoinShares ETP, with the remainder in JitoSOL and cash.

Institutional Appetite Tests Layer 1 Power Balance

Speaking with Cryptonews, Maria Carola, CEO of StealthEX, views the Solana ETF wave as a defining moment in blockchain competition.

Carola notes projections of $3 billion in ETF inflows over 12-18 months depend on Solana maintaining its 2024 momentum in DeFi expansion and network stability.