Solana ETF Race Heats Up: Cboe BZX Files Four New Applications

The race for Solana-based ETFs in the U.S. has intensified as Cboe BZX Exchange submitted four refiled applications on behalf of prominent investment firms. The new 19b-4 filings, submitted on Tuesday, cover the Canary Solana Trust, Bitwise Solana ETF, 21Shares Core Solana ETF, and VanEck Solana Trust. This move restarts the Securities and Exchange Commission's (SEC) review process for spot Solana investment products, following the withdrawal of previous applications at the regulator's request.

If approved, these ETFs would provide traditional investors with exposure to Solana without directly holding the cryptocurrency, potentially expanding access to the digital asset market. The latest filings capitalize on the momentum of crypto ETF approvals, with Bitcoin and Ethereum products gaining SEC clearance in early 2024. However, Solana faces unique regulatory challenges, primarily centered on whether it qualifies as a commodity or security.

Both the Canary Solana Trust and VanEck Solana Trust are seeking approval under commodity-based trust frameworks. The proposals argue that Solana's decentralized structure and proof-of-stake consensus mechanism qualify it as a commodity, mirroring successful Bitcoin and Ether ETF strategies. The filings also assert that manipulation can be prevented without surveillance-sharing agreements, citing trading volume and round-the-clock global markets.

The proposals reveal distinct approaches to addressing regulatory concerns. VanEck emphasizes declining ownership concentration and validator autonomy, while Canary focuses on operational safeguards such as segregated cold storage and detailed net asset value (NAV) calculations. Both sponsors carefully position their products within established crypto-commodity ETF frameworks.

Meanwhile, Grayscale has separately pursued its own Solana ETF ambitions, filing in December to convert its existing Solana Trust into an ETF on NYSE Arca. As Solana maintains its position as the third-largest cryptocurrency, with a market capitalization exceeding $111 billion, the push for Solana ETFs signifies growing interest in integrating digital assets into traditional investment frameworks.