Joining a competitive race amid Solana’s significant market growth, Grayscale Investments has filed with the SEC to convert its Solana Trust into a spot ETF on NYSE Arca.
Filing and SEC Requirements
Grayscale Investments, a leading digital asset manager, has initiated steps to convert its Solana Trust (GSOL) into a spot exchange-traded fund (ETF). The firm filed the necessary documentation with the U.S. Securities and Exchange Commission (SEC) to list the proposed ETF on NYSE Arca, the exchange responsible for the application.
Grayscale’s proposal was submitted through a 19b-4 filing by NYSE Arca on December 3, 2024. The SEC requires this type of filing to review rule changes proposed by self-regulatory organizations, such as stock exchanges. If approved, the ETF would trade on the New York Stock Exchange under the ticker GSOL.
Accompanying the 19b-4 filing, Grayscale must also submit an S-1 registration statement. Approval of this form would pave the way for public listing.
Grayscale’s Position in the Market
Grayscale’s Solana Trust, launched in 2021 as the firm’s 16th investment product currently holds $134.2 million in assets under management. According to the filing, this makes it the world’s largest Solana-focused investment vehicle by assets. The Solana held by the trust represents approximately 0.1% of the total circulating supply of SOL tokens.
The conversion from the existing Solana Trust to an ETF would mark another milestone for Grayscale, which has already transitioned its flagship Bitcoin and Ethereum trusts into ETFs earlier this year.
The ETF’s custodian will be Coinbase Custody, while BNY Mellon Asset Servicing will serve as its administrator and transfer agent. These established institutions add a layer of credibility and security to the proposed product.
Intensifying Competition for Solana ETFs
Grayscale joins an increasingly crowded field of asset managers vying to launch the first Solana ETF. Competitors such as Bitwise, VanEck, 21Shares, and Canary Capital have already filed similar proposals earlier this year. Franklin Templeton is reportedly considering entering the space as well.
The growing interest in Solana ETFs aligns with the cryptocurrency’s strong market performance. Over the past year, Solana’s price has surged by 277%, with its market capitalization exceeding $112 billion. As of December 4, Solana is trading at $238, reflecting a year-to-date increase of over 130%.
Outlook
Grayscale’s move underscores the evolving demand for regulated investment products centered on blockchain assets. While the SEC’s approval process remains uncertain, Grayscale’s history of successful ETF launches could bolster its case. Should GSOL gain regulatory approval, it would offer institutional and retail investors a new avenue to gain exposure to Solana, further cementing its position in the digital asset ecosystem.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
