SEC's October Staking ETF Ruling Could Cement Solana as Top Institutional Yield Asset

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Multiple major asset managers, including Grayscale, Fidelity, Bitwise, VanEck, and Franklin Templeton, have submitted amended S-1 filings to the U.S. Securities and Exchange Commission (SEC) for Solana (SOL) exchange-traded funds (ETFs) that include staking provisions. These filings, which enable the funds to generate yield via Solana’s proof-of-stake mechanism, could receive regulatory approval as early as mid-October 2025. Analyst Nate Geraci of NovaDius Wealth Management predicts approvals within two weeks, citing streamlined SEC processes and coordinated filings by seven leading firms. The inclusion of staking features marks a significant shift in institutional crypto adoption, as it allows funds to earn rewards in cash or SOL tokens, enhancing net asset value and shareholder returns.

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The momentum for Solana ETFs is supported by strong investor demand. Bitwise’s European Solana staking ETP attracted $60 million in inflows over five trading days, while the REX-Osprey Solana Staking ETF in the U.S. recorded $10.6 million in net inflows in a single session and surpassed $250 million in assets under management (AUM) within two months of its launch. REX-Osprey recently restructured its fund to a regulated investment company, eliminating federal and state taxes at the fund level to improve tax efficiency. These developments underscore growing institutional confidence in Solana as a yield-generating asset, with Pantera Capital describing it as “next in line” for institutional adoption following Bitcoin and Ethereum.

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Regulatory clarity has accelerated the approval process. In September 2025, the SEC approved Grayscale’s ETH products to transition from case-by-case approvals to standardized listing frameworks, a move expected to expedite future crypto ETF launches. This shift aligns with broader efforts to modernize crypto regulations, as highlighted by Bloomberg analyst James Seyffart, who noted the SEC’s “movement” toward approving staking-enabled products. The inclusion of staking in Solana ETFs could also set a precedent for Ethereum ETFs, which have faced delays in staking permission. Markus Thielen of 10x Research suggested that Ethereum ETFs with staking could “dramatically reshape the market,” emphasizing the importance of yield generation for institutional investors.

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The potential approval of Solana ETFs with staking could redefine institutional participation in the crypto market. Grayscale’s CoinDesk Crypto 5 ETF, which includes Solana and XRP, recorded $22 million in first-day trading volume, while Fidelity’s proposed staking ETF plans to utilize liquid staking protocols like Marinade and Jito. These strategies address liquidity concerns by allowing investors to earn staking rewards while maintaining tradability of their holdings. Staking yields for Solana currently range between 5.5% and 7.5%, significantly outpacing Ethereum’s 2-3%, making Solana ETFs an attractive option for investors seeking both capital appreciation and passive income.

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The broader implications for the crypto ecosystem are substantial. Institutional adoption of staking-enabled Solana ETFs could enhance network security by aggregating staked SOL across high-performance validators, reducing centralization risks. Additionally, the influx of institutional capital is expected to increase Solana’s liquidity and market depth, potentially stabilizing price volatility. Analysts project that if approved, these ETFs could attract $3-6 billion in inflows by year-end 2025, driving the price of SOL toward $250-$300. However, risks remain, including regulatory uncertainty, validator concentration, and potential liquidity shocks during approval phases.

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The approval timeline for Solana ETFs is closely watched by market participants. With key decision dates clustered in October and November 2025, the SEC’s final rulings could trigger a surge in demand for Solana-based products. The recent success of the REX-Osprey ETF and the coordinated filings by major asset managers signal a pivotal moment for institutional crypto adoption. As the SEC continues to refine its regulatory approach, the approval of staking-enabled Solana ETFs could serve as a catalyst for broader altcoin exposure, reshaping the competitive landscape for digital assets in traditional finance.

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