Bitwise Files Solana ETF Application, Becoming Fourth US Applicant

TLDR

• Bitwise becomes fourth company to file for Solana ETF in US
• Filing comes amid Trump’s expected return to White House and potential regulatory changes
• Other companies in race: Canary Capital, VanEck, and 21Shares
• Solana (SOL) approaching all-time highs from 2021
• Bitwise currently manages $5 billion in assets, already offers BTC and ETH ETFs

Cryptocurrency investment firm Bitwise has entered the competition to launch the United States’ first Solana exchange-traded fund (ETF), filing necessary paperwork with the Securities and Exchange Commission (SEC) on Thursday. This move makes Bitwise the fourth company seeking to offer a Solana ETF to American investors.

The firm joins a growing list of applicants that includes Canary Capital, which submitted its filing in October, along with VanEck and 21Shares, both of which initiated their applications in June. This latest development adds momentum to the push for expanded cryptocurrency investment products in traditional financial markets.

Bitwise’s application comes at a time of political transition, with Donald Trump’s upcoming return to the White House in January 2024. The change in administration is expected to bring new leadership to the SEC, as current Chair Gary Gensler is scheduled to step down on January 20, coinciding with Trump’s inauguration.

The timing of Bitwise’s filing appears strategic, as the company already maintains a strong presence in the cryptocurrency ETF space. The firm currently offers several ETF products tracking Bitcoin and Ethereum, which are generally classified as commodities in the United States regulatory framework.

Demonstrating its willingness to explore new territories, Bitwise has previously filed ETF applications for other digital assets, including XRP. This latest move to pursue a Solana ETF aligns with the company’s pattern of seeking opportunities in emerging cryptocurrency markets.

Solana’s native token, SOL, has emerged as a standout performer in the current cryptocurrency bull market. The blockchain platform has gained particular attention as a hub for trading activity, especially within the memecoin sector. The token’s price performance has been notable, approaching its previous all-time highs recorded during the peak of the last bull market in late 2021.

Before the official SEC filing, Bitwise had indicated its intentions through a corporate filing in Delaware. When asked about the filing, Bitwise Chief Investment Officer Matt Hougan confirmed its authenticity but declined to provide additional comments on the matter.

The company has established itself as a major player in the cryptocurrency investment space, with a reported $5 billion in assets under management as of last month. Bitwise has particularly focused its marketing efforts on reaching registered investment advisers in the United States.

In partnership with Cboe, Bitwise has completed an important step in the ETF application process. Cboe published 19b-4 forms for all four Solana ETF applications on Thursday, although Bitwise’s S-1 form, another crucial document required for ETF launch, was not available at the time of reporting.

The process of launching a new ETF involves multiple regulatory requirements and approvals. Each applicant must submit various forms and meet specific criteria set by the SEC before receiving authorization to offer their product to investors.

If approved, a Solana ETF would provide traditional investors with exposure to SOL’s price movements without the need to directly hold or manage the cryptocurrency. This type of investment vehicle could potentially make it easier for institutional investors to gain exposure to Solana’s ecosystem.

SOL serves as the primary token for conducting transactions on the Solana blockchain, similar to how ETH functions on the Ethereum network. The token is essential for paying transaction fees and participating in network operations.

The competitive landscape for Solana ETF applications has intensified with Bitwise’s entry. Each applicant brings different approaches and expertise to their proposals, potentially offering varied benefits to potential investors.

As the review process continues, the SEC will evaluate each application based on various factors, including market manipulation concerns, investor protection measures, and overall market stability considerations.

Bitwise’s existing relationship with financial advisers and its experience in managing cryptocurrency ETFs could potentially influence the SEC’s evaluation of their application.