The approval of the Solana ETF is not an endpoint, but the starting gun for a new era.

Author: Cathy, Blockchain in Plain Language

At the end of October 2025, the crypto world witnessed a historic moment. Solana (SOL) broke through the last regulatory barrier, becoming the third cryptocurrency asset in the U.S. to receive approval for a spot exchange-traded product (ETP), following Bitcoin and Ethereum.

This is not just another boring news story about an ETF approval. The approval process was dramatic, its product design was intricate, and the market reaction 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 was anything but ordinary. It did not emerge from a public vote by the SEC (U.S. Securities and Exchange Commission) or enthusiastic press releases, but rather during a chaotic period when the U.S. federal government was "shut down."

During this unique window of limited regulatory agency functions, two asset management giants—Bitwise and Grayscale—demonstrated remarkable legal acumen. They took advantage of the guidelines released by the SEC during this period, allowing S-1 registration statements to automatically take effect without "delay amendments."

• October 28: Bitwise Solana Staking ETF (Ticker: BSOL) was the first to list on the New York Stock Exchange (NYSE).

• October 29: Grayscale Solana Trust (Ticker: GSOL) quickly followed, successfully converting its trust product into an ETP.

This "regulatory raid" opened a compliant investment gateway for tens of thousands of billions of dollars in institutional capital and retail retirement accounts in the U.S.

The data from the first week was "heavyweight," according to the total Solana ETPs in the U.S.:

• First-week net inflow: $199.2 million

• Total assets under management (AUM) quickly surpassed $500 million.

But the "averages" masked the truth. Behind this nearly $200 million inflow was an extremely brutal, winner-takes-all "Wall Street civil war."

• Winner: Bitwise (BSOL), with a first-week net inflow of $197 million and a total AUM (including seed capital) of about $420 million.

• Loser: Grayscale (GSOL), with a first-week net inflow of $2.18 million and a total AUM (including converted assets) of about $101 million.

You read that right. Of the new inflows, Bitwise's BSOL captured nearly 99% of the market share. This seemingly evenly matched contest was actually decided on the first day.

Why was it so one-sided? The answer lies in the textbook "three elements of a blitzkrieg" for BSOL:

Timing (one day faster, win it all): BSOL listed on October 28 (Tuesday), while GSOL completed its 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 successfully defined itself as the "authentic" Solana ETF.

Price (0.20% vs 0.35%): BSOL's management fee is only 0.20%, and it is completely free for the first three months or until AUM reaches $1 billion. In contrast, GSOL's rate is as high as 0.35%. For cost-conscious institutional investors, this 0.15% annualized difference is something they cannot ignore.

Product (100% vs 77%): This is the most critical "secret weapon." BSOL promised in its prospectus to use 100% of its SOL assets for staking. In contrast, GSOL only committed to staking 77% of its assets.

For those outside the crypto circle, this 23% difference may seem trivial. But for those in the know, this is precisely what makes the Solana ETF revolutionary.

02 "Yield-Generating" ETF

The launch of the Solana ETF is structurally more revolutionary than the Bitcoin ETF.

The Bitcoin ETF is merely a vault for "digital gold." You hold it, and it generates no income. In contrast, Solana is a proof-of-stake (PoS) asset; holding it (and staking) is like owning a "digital real estate" that continuously generates rental income.

The allure of "yield-generating assets"

• Yield crush: Solana's staking annual percentage yield (APY) ranges from 5% to 7%. This is not only far higher than Ethereum's approximately 2% yield but also provides institutional investors with a "unique source of income."

• Shift in narrative: Bitwise's Chief Investment Officer (CIO) Matt Hougan summarized it bluntly: "Institutional investors love ETFs; they love income. Solana has the highest income of all blockchains. Therefore, institutional investors love the Solana ETF."

• Nature of the product: Investing in a Bitcoin ETF means betting on the price appreciation of "digital gold." In contrast, investing in a Solana ETF means betting on price appreciation while also obtaining a substantial cash flow (staking income) unrelated to traditional bonds or stocks.

The biggest "Easter egg" lies in the SEC's attitude.

When the Ethereum ETF was approved in 2024, the term "staking" was an absolute taboo. The SEC was vehemently opposed to the "securities" attributes that staking might involve, forcing all issuers to delete relevant clauses overnight.

This time, however, the SEC quietly "let it go." It allowed the listing of the two "staking-inclusive" products, BSOL and GSOL.

This tacit approval marks a significant shift in the SEC's regulatory stance. It opens up a 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 Prices Plummet Under "Huge Good News"?

Just as Wall Street celebrated this ETF victory, all the traders glued to their candlestick charts were plunged into great confusion:

If nearly $200 million flowed into the ETF in its first week, why did the price of SOL plummet?

Data shows that after the ETF launch, the price of SOL not only did not rise but instead significantly retraced. On October 30, the price dropped 8% in a single day and retraced 27% from its recent August high, even falling to around $163, far below the expected $300.

"Increased inflow, price drop"—this abnormal phenomenon 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 rumor, sell the news": This is the most classic script. A large number of short-term traders who had positioned themselves weeks (or even months) before the ETF approval concentrated their profits at the moment the "news landed."

• Historical repetition (Bitcoin): This mirrors the trend after the Bitcoin ETF launched in January 2024. At that time, BTC's price also experienced stagnation and decline (about -5%) after the ETF launch, despite strong inflows. The real rebound began weeks later, once the selling pressure from "selling the news" was fully absorbed.

• Macro "perfect storm": The timing of the Solana ETF launch was "hellishly difficult." It coincided with a risk-off wave across the entire crypto market. During the same period (the week of October 27), the Bitcoin ETF experienced massive outflows of up to $600 million to $946 million, with the market as a whole "bleeding."

• "Whale" sell-off: This was the most lethal blow. On-chain data shows that trading giant Jump Crypto exchanged 1.1 million SOL (worth about $205 million) for Bitcoin on October 30—the second day after BSOL's listing.

Now, let's piece together all the clues:

In a "sell the news" sentiment surge, with the Bitcoin ETF bleeding over $600 million, a giant whale sold $205 million worth of SOL into the market.

In a normal market environment, this would be enough to trigger a collapse in SOL prices.

However, in the last week of October 2025, this $205 million sell-off was almost perfectly absorbed by the $199.2 million of new institutional buying brought in by the Solana ETF (mainly BSOL).

This is the truth: The inflow of funds into the SOL ETF, amidst overall market bleeding, demonstrated astonishing "relative strength." A new batch of institutional investors (ETF buyers) was directly absorbing the sell-off from another batch of established institutions (Jump Crypto). This was not a bearish signal; rather, it was a strong long-term bullish signal. It proved that a powerful, continuous new institutional buying force had formed.

04 What’s Next for the Solana ETF?

With the ETF approval, Wall Street's next question is: How much capital can it attract? On this question, there is a significant divergence between crypto-native companies and traditional financial giants:

• Bullish camp (crypto-native): Grayscale's research director Zach Pandl predicts that Solana ETPs could absorb 5% of Solana's total supply in the next one to two years, which, at current prices, translates to over $5 billion in inflows.

• Cautious camp (traditional finance): Giant JPMorgan appears "out of sync." In a report, they predicted that the net inflow for the Solana ETF in the first year would only be $1.5 billion.

Why is JPMorgan so conservative? Their reasoning is: "Weak institutional awareness of Solana," along with concerns about the increasing dominance of "Meme coin trading" in its network activity.

JPMorgan's concerns represent the general anxiety of traditional finance: Is Solana a high-tech financial infrastructure or a "Meme coin casino" filled with speculators?

However, just two days after the ETF listing, a new 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 move: Western Union has chosen the Solana blockchain as the issuance network for its new stablecoin—U.S. Dollar Payment Token (USDPT)—set to launch in the first half of 2026.

Western Union explicitly stated in the announcement that the reason for choosing Solana was its "high performance," "high throughput, low cost, and instant settlement."

The impact of this news far exceeded that of the ETF. It perfectly answered JPMorgan's question. You wouldn'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 Conclusion

The approval of the Solana ETF is not an endpoint, 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 (like Bitwise) are packaging SOL (tokens) into a "yield-generating" financial asset to sell to their institutional clients.

• Infrastructure track (Western Union): Global enterprises (like Western Union) are treating Solana (network) as a "low-cost" financial infrastructure to build their core business upon.

These two tracks will reinforce each other. The adoption by Western Union provides the strongest fundamental support for institutions purchasing ETFs; while the massive AUM and professional staking brought by the ETF (Bitwise's "New Wall Street" narrative) will, in turn, provide a safer and more stable network for builders like Western Union.

While JPMorgan is still worried about "Meme coins," Bitwise and Western Union have already proven through action: Solana is not only "New Wall Street," but it is also the "new infrastructure" for Wall Street and global payments. The flywheel of financialization and infrastructuralization has begun to accelerate simultaneously.

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