Cboe Doubles Down on Solana ETF as Institutional Craze for Layer 1 Tokens Heats Up
Wall Street's latest crypto crush isn't Bitcoin—it's Solana. Cboe's aggressive ETF push signals a tectonic shift in institutional demand for Layer 1 blockchains.
Why Solana? Speed, scalability, and that sweet institutional FOMO. While Ethereum stumbles with gas fees, SOL's 400ms block times are turning heads in trading pits.
The ETF arms race heats up. After Bitcoin and Ether funds dominated 2024, TradFi giants are scrambling for the next big thing. Enter Solana—the 'high-performance altcoin' suddenly getting Goldman Sachs PowerPoint slides.
Regulatory hurdles loom. SEC Chair Gary Gensler still twitches at the word 'crypto,' but Cboe's move suggests the agency might finally be warming to non-Bitcoin products. Or maybe they just want in on those sweet, sweet management fees.
One thing's clear: When CME starts offering SOL futures next quarter, the 'institutional adoption' narrative will reach deafening levels. Just in time for the next bull run—how convenient.
Invesco and Galaxy Target Solana Exposure
The Cboe BZX Exchange has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) seeking approval to list the Invesco Galaxy Solana ETF. The fund, jointly developed by global asset manager Invesco and digital asset firm Galaxy Digital, would give investors direct exposure to Solana (SOL), one of the leading Layer 1 blockchains.
This move follows a growing interest among institutional players to offer regulated investment vehicles tracking alternative blockchain assets beyond Bitcoin and Ethereum. Similar filings for spot Solana ETFs have already been made by VanEck and 21Shares, reflecting increased momentum toward broader crypto ETF offerings.
A First-of-Its-Kind Staked ETF Model
What distinguishes the proposed Invesco Galaxy Solana ETF is its integrated staking mechanism. If approved, it WOULD become the first U.S.-listed ETF to not only hold SOL directly but also stake a portion of its holdings with selected validators. This design introduces an additional revenue stream via staking rewards, which would be treated as income to the trust and reflected in the fund’s returns.
Traditional ETFs typically mirror the asset’s price performance alone. This proposed model, by incorporating staking, adds a yield component that could appeal to investors seeking both appreciation and income within a regulated framework.
Pricing and Market Structure
To provide accurate pricing data, the ETF will rely on the Lukka Prime Solana Reference Rate, updated every 15 seconds. This benchmark aggregates prices from both large and small centralized exchanges, including Binance, Coinbase, Kraken, and OKX, offering a composite price reflective of broader market conditions.
Cboe BZX also highlighted Solana’s strong market infrastructure in its SEC filing. The exchange argued that Solana’s global, round-the-clock trading across decentralized and centralized platforms reduces susceptibility to manipulation, a key factor in previous SEC rejections of crypto ETFs.
With over $2.7 billion in daily trading volume, Solana’s liquidity was emphasized as a safeguard against market distortions, bolstering the case for regulatory approval.
Broader ETF Push: Injective Filing Adds Momentum
The Solana ETF proposal arrives alongside another Cboe BZX filing seeking approval for a separate crypto product—an ETF tracking the native token of the Injective protocol (INJ). Sponsored by Canary Capital Group, the Canary Staked INJ ETF aims to provide direct exposure to the Injective ecosystem while incorporating staking features similar to the Solana proposal.
These filings underscore a strategic pivot by fund issuers and exchanges aiming to diversify crypto ETF offerings and secure a foothold beyond the traditional Bitcoin and ethereum space.
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
