Grayscale’s Debut of Solana ETF GSOL Sees Modest Inflows
Recently, the crypto community has witnessed a significant event – the launch of the Grayscale’s GSOL, a U.S. spot Solana exchange-traded fund. According to data, the fund made a modest start, attracting net inflows of $1.4 million on its debut day, October 29. This marked a significant milestone, as the GSOL completed its journey from being a closed-end trust.
Comparing GSOL and Bitwise’s BSOL Performance
However, it was not just Grayscale that marked the entry into the Solana ETF spectrum that week. A day earlier, on October 28, Bitwise’s BSOL had been launched. When compared, BSOL managed to steal the limelight by accumulating $46.5 million net inflows on the second day, an impressive figure over GSOL’s $1.4 million. On its first day, BSOL had attracted $69.5 million worth of inflows. The trading volume for BSOL stood at an astounding $57.9 million on the very first day, making it the most successful ETF launch this year so far.
Behind the Figures: GSOL vs. BSOL
A deeper analysis reveals interesting aspects of these Solana ETFs. Grayscale’s GSOL commands a higher fee – at 0.35%, compared to BSOL’s 0.2%. On its first trading day, GSOL observed $4.9 million in trading volume—a figure overshadowed by BSOL’s $75 million volume on its second day. The early lead is attributed to Bitwise’s first move advantage, although the game is still far from over. With more Solana ETF issuers, like Fidelity, VanEck, and 21Shares, set to enter the arena, it will be interesting to see the shifting dynamics in this sector.
SSK: The Pioneer in Solana ETFs
Even before the buzz of BSOL and GSOL had caught on, there were pioneers in the U.S. ETF market offering Solana exposure under the Investment Company Act of 1940. In July, REX-Osprey introduced the first such ETF, the SSK. Unlike BSOL and GSOL that used the usual 1933 route, SSK made its mark by holding a majority of its assets in directly staked SOL, along with some exposure through exchange-traded products and liquid staking tokens.
Impacts of the U.S. Government Shutdown
The recent U.S. government shutdown had interesting effects on the ETF market. The Security and Exchange Commission, during the shutdown, allowed ETF issuers to proceed without directly requiring staff review. They could file final S-1s without delaying amendments and utilize newly approved generic listings for commodity trust shares. This enabled the ETF launches such as GSOL and BSOL to move forward despite the limited operations.
The Story of Canary Capital’s HBAR and Litecoin ETFs
Alongside GSOL and BSOL, there were other significant happenings in the ETF universe. Canary Capital’s newly launched HBAR (HBR) and Litecoin (LTCC) ETFs saw $7 million and $1.5 million in trading volume on October 29, respectively compared to their launch-day volumes of $8.6 million and $1.4 million, respectively. They also reported initial net inflows, with HBR adding $2.2 million and LTCC adding $485,000 on October 29.
Bitcoin and Ethereum ETFs Experience Significant Outflows
In contrast to the new launches, the U.S. spot Bitcoin and Ethereum ETFs experienced a significant net outflow. On October 29, these funds lost more than $500 million, triggered by Federal Reserve Chair Jerome Powell’s hawkish tone despite announcing another 25 bps rate cut. Of these, Bitcoin ETFs saw the largest exodus of funds, with $470.7 million exiting these funds. The Ethereum ETFs followed suit with $81.4 million in net outflows overall.
The Current Crypto Trading Scenario
Despite the fluctuations in ETF performance, the crypto trading market remains active and diverse. Bitcoin and Ethereum, the crypto giants, experienced a 2.4% decrease over the past 24 hours. While Solana and Litecoin fell by 0.9%, and 0.2% respectively, HBAR managed to gain 4% in the same period. With ongoing changes in financial conditions, changes to the ETF market flow continue to impact the moves in the crypto world.
