Solana News Today: Crypto ETFs' Staking Arms Race: Fee Cuts Attract Institutional Capital

Bitwise and 21Shares have introduced competitive enhancements to their cryptocurrency exchange-traded funds (ETFs), integrating staking features and slashing fees to attract institutional and retail investors. Bitwise's proposed "Bitwise Solana Staking ETF" now includes a 0.20% annual management fee, significantly lower than the typical 0.15%-0.25% range for crypto ETFs. The fund, which will be 100% physically backed by Solana (SOL) spot assets, also offers a temporary fee waiver for the first $1 billion in assets during the first three months post-launch. This strategy aims to accelerate inflows and position the fund as a benchmark in the growing staking ETF market. The SEC has until October 16 to approve the filing, with listing on the Cboe BZX Exchange expected if approved.

21Shares has similarly updated its Ethereum ETF (TETH) to include staking rewards and a 0.21% sponsor fee, which will be waived for 12 months starting October 9. The firm's approach aligns with broader industry trends, as staking-enabled ETFs gain traction by offering passive income alongside exposure to crypto price movements. Grayscale, another major player, recently launched its first U.S. staking ETFs for Ethereum and Solana, further intensifying competition in the sector. Analysts note that the integration of staking addresses a key barrier for institutional adoption by simplifying yield generation without requiring complex validator management.

The fee reductions and staking features reflect a strategic shift in the crypto ETF landscape. Bitwise's 0.20% fee undercuts most competing proposals, which typically range between 0.21% and 0.25%. For example, the REX-Osprey Solana Staking ETF charges a 0.75% fee, yet faces tracking issues and liquidity challenges. 21Shares' Ethereum ETF, with a 0.21% fee, now matches the competitive pricing of approved products while enhancing its appeal through staking rewards. These moves underscore a broader "fee war" in the crypto ETF space, driven by investor demand for cost-effective, yield-generating products.

Regulatory developments have also facilitated the rise of staking ETFs. The SEC's September 2025 approval of new listing standards for crypto ETFs streamlined the approval process, reducing the timeline from 240 to 75 days. Additionally, the SEC's May 2025 guidance clarified that protocol staking on proof-of-stake blockchains does not constitute securities offerings, reducing legal uncertainties for issuers. These changes have enabled firms like Bitwise and 21Shares to innovate more rapidly, with staking becoming a differentiator in a market increasingly focused on passive income.

Market analysts highlight the potential for these ETFs to attract both retail and institutional capital. Bloomberg's Eric Balchunas described Bitwise's low fees and staking integration as a "bold push" to capture early inflows, noting that such strategies have historically correlated with strong investor interest. The temporary fee waivers further incentivize early adoption, a tactic previously used by VanEck for its Bitcoin ETF. For institutional investors, the physical backing of assets and transparent staking mechanisms address concerns about custody risks and operational complexity. However, analysts caution that regulatory delays and market volatility remain risks, particularly for funds awaiting SEC approval.

The integration of staking into ETFs marks a pivotal moment for crypto adoption, aligning with broader institutional interest in proof-of-stake networks like Solana and Ethereum. By combining exposure to price appreciation with yield generation, these products address a key limitation of traditional crypto holdings. As the SEC evaluates applications, the success of Bitwise's Solana ETF and 21Shares' Ethereum ETF could set a precedent for future offerings, potentially reshaping the competitive landscape and expanding access to staking rewards for a wider investor base.

Source: [1] Bitwise Unveils Solana ETF with 0.20% Fee and Staking (https://coincentral.com/bitwise-unveils-solana-etf-with-0-20-fee-and-staking-for-investors/)

[2] Bitwise Amends Its Solana ETF filing Ahead of SEC approval (https://www.cryptotimes.io/2025/10/09/bitwise-amends-its-solana-etf-filing-ahead-of-sec-approval/)

[3] Bitwise Solana ETF Adds Staking Rewards with Ultra-Low 0.20% Fee (https://www.hokanews.com/2025/10/bitwise-solana-etf-adds-staking-rewards.html)

[4] Why Crypto ETF Issuers Are Betting Big on Staking Rewards (https://beincrypto.com/crypto-etfs-etps-staking-surge/)

[5] 12 Ethereum ETFs to earn staking rewards - UCITS ETFs (https://www.ucits-etfs.com/guides/12-ethereum-etfs-to-earn-staking-rewards/)

[6] Bitwise and 21Shares Add Staking, Slash Fees in Latest Solana ... (https://decrypt.co/343490/bitwise-21shares-staking-fees-solana-ethereum-etf)

[8] Grayscale Unleashes First US Crypto ETFs with Staking for ... (https://markets.financialcontent.com/stocks/article/breakingcrypto-2025-10-6-grayscale-unleashes-first-us-crypto-etfs-with-staking-for-ethereum-and-solana-revolutionizing-passive-income-for-investors)