Bitwise Lowers the Bar for Fees in Solana Staking ETF Race

Analysts believe the move positions Bitwise ahead of rivals as multiple Solana ETF applications await possible approval by mid-October. Meanwhile, Canary Capital’s proposed Litecoin and HBAR ETFs seem close to approval after final filings, but the ongoing US government shutdown stalled SEC operations, delaying their launch. Analysts say that while Canary’s higher 0.95% fee is typical for newer assets, investor demand could soon drive rivals to offer cheaper alternatives once regulatory activity resumes.

Bitwise Cuts Costs in Solana ETF Race

Bitwise Asset Management filed an amended application for its US-based Solana exchange-traded fund (ETF), setting its annual management fee at just 0.20%. It also added a staking feature, which industry analysts believe could be the start of fierce competition among potential Solana ETF issuers. 

ETF analyst Eric Balchunas described the move as a strategic preemptive strike in what he called the “Terrordome” of ETF pricing. He believes Bitwise likely wanted to get ahead of the inevitable fee war. “They probably figured it’s gonna end up there anyway, so just do it now,” Balchunas wrote in an X post on Wednesday.

The 0.20% fee puts Bitwise’s proposed Solana ETF near the midpoint of the typical range for crypto ETFs, which generally fall between 0.15% and 0.25%. Balchunas explained that low fees consistently proved to attract stronger investor inflows, and called it “a good sign for inflow potential.” The addition of staking functionality, meanwhile, could make the fund even more appealing to investors by allowing it to generate more yield directly from Solana’s network operations.

Competition over ETF fees has long been a major battleground among crypto asset managers. Before the launch of spot Bitcoin ETFs in January of 2024, issuers slashed fees aggressively to capture early market share. VanEck even waived all management fees temporarily, and later extended the offer through January 2026 for up to $2.5 billion in assets. Grayscale priced its Bitcoin Mini Trust at just 0.15%.

Bitwise’s approach suggests that it intends to follow a very similar playbook in the Solana ETF race. The move also sheds some light on the growing divide between ETF issuers in the Solana space. 

The REX-Osprey Solana Staking ETF (SSK), the first US Solana staking ETF, debuted on July 2 with $12 million in inflows but charges a much higher management fee of 0.75%. Balchunas pointed out that Bitwise’s proposal seems to offer stronger tracking and full spot asset backing compared to SSK, which he said has been plagued by tracking issues similar to futures-based ETFs.

Despite growing enthusiasm, some people in the crypto community still question why BlackRock  had not filed for a Solana ETF. ETF analyst James Seyffart said it will be “messed up” if BlackRock were to file at the last minute and launch alongside others after competitors already worked extensively with the SEC. 

According to analyst Nate Geraci, several Solana ETF applications with staking features could receive US approval as soon as mid-October.

Litecoin and HBAR ETFs Face Delay

Meanwhile, asset manager Canary Capital seems to be closing in on approval for its proposed Litecoin and Hedera (HBAR) ETFs after filing amendments. However, the ongoing US government shutdown is likely to delay their launch. The firm submitted final details for both spot ETFs on Tuesday, including a 0.95% annual management fee and tickers “LTCC” for the Canary Litecoin ETF and “HBR” for the Canary HBAR ETF. 

Eric Balchunas said on X that these updates are “typically the last thing updated before go-time,” which suggests approval may be up ahead once the Securities and Exchange Commission (SEC) resumes normal operations. “The filings look pretty finalized to me,” Balchunas added, though he acknowledges the uncertainty around timing given that much of the SEC is still inactive during the shutdown. Fellow Bloomberg analyst James Seyffart agreed by saying it “feels like Litecoin and HBAR ETFs are at the goal line.”

Analysts at Bitfinex previously predicted that the approval of ETFs tied to altcoins could trigger a renewed rally in the crypto market by giving mainstream investors new avenues for exposure beyond Bitcoin and Ethereum. 

While Canary’s 0.95% management fee is higher than the 0.15% to 0.25% range that is typical for spot Bitcoin ETFs, Balchunas said it’s “pretty normal” for funds targeting newer or more niche assets. He added that if the funds attract strong investor interest, competitors could enter the market with lower fees, which will lead to competition among issuers.

Despite the government shutdown, ETF filings continued to pour in. Balchunas pointed out that issuers have been aggressively submitting applications for leveraged 3x ETFs across a range of asset classes. Firms like Tuttle Capital, GraniteShares, and ProShares collectively filed dozens of new proposals. Balchunas estimates that around 250 3x ETF filings are now pending. 

The SEC was expected to decide on at least 16 new crypto ETF applications in October, but the shutdown that began on Oct. 1stalled progress. Although the SEC announced it would continue operating with a limited staff, most regulatory reviews have been paused. 

The delay frustrated an industry that was anticipating faster approvals under new listing standards that were announced in September. They were designed to streamline the process by eliminating the need for case-by-case assessments. For now, the fate of Canary’s Litecoin and HBAR ETFs is on hold until the government reopens and the SEC resumes normal activity.