Grayscale launches Solana ETF! Stake annualized 7% institutions rush to grab, SOL aims for 500 dollars

Grayscale Investments has launched its Solana ETF that supports staking, which has received $103 million in seed funding. Bitwise's Solana Staking ETF saw an inflow of $69 million on its first day of trading. The expanding institutional demand will further tighten liquidity, pushing the price of SOL to break through $500.

Grayscale and Bitwise Ignite Solana ETF Competition

(Source: Farside Investors)

According to an announcement released on October 29, the Grayscale Solana Trust ETF has begun trading on the New York Stock Exchange Arca platform under the code GSOL. The product includes a staking function, allowing investors to earn rewards through Solana's Proof of Stake (PoS) network. Inkoo Kang, the Senior Vice President of Grayscale responsible for the ETF, stated that the new product “expands the range of options for investors.” The company claims to have become one of the largest managers of Solana exchange-traded products (ETPs) in the United States, based on assets under management.

This issuance follows the launch of the Solana stake ETF by Bitwise on Tuesday, which has an initial asset management scale of $222.9 million. Grayscale's seed round fundraising scale is $102.7 million, less than half of Bitwise's. According to data from Farside Investors, there are currently only two products in the U.S. Solana ETF market, from Bitwise and Grayscale. These two companies have raised a total of $325.6 million in seed funding, with Bitwise receiving $69.5 million in inflows on its first day of listing.

According to SosoValue's data, on October 28, Bitwise's Solana Staking ETF (BSOL) saw an inflow of $69 million on its first trading day, making it the strongest performer among the approximately 850 ETFs launched this year. Additionally, the fund's trading volume reached $57.9 million, surpassing all other newly launched ETFs this year. The inflow of funds into the ETF reflects the situation of new capital entering the fund, while the trading volume measures investor participation. Both indicators are important, as a high inflow of funds but inactive trading activity may indicate that the funds come from internal injections rather than genuine market demand.

Considering that BSOL has achieved strong results in both of these indicators, this indicates a genuine and diversified interest from investors, rather than passive seed round investments or speculative noise. Therefore, Bloomberg's Eric Balchunas described the debut of the Solana ETF as “a strong start,” while noting that BSOL has $220 million in seed funding. He stated that if the seed funding is fully deployed on the first day, the fund's fundraising amount on the first day could reach $280 million. This would help it surpass the performance of BlackRock's Ethereum ETF on its first day.

The staking feature makes Solana ETF stand out

(Source: Tom Wan)

Both the Bitwise and Grayscale brands of Solana ETF offer staking features. Kristin Smith, director of the Solana Policy Research Institute, stated: “By staking these products, investors can not only gain investment opportunities but also have the chance to help secure network safety, accelerate developer innovation, and earn rewards.” In other words, the Solana held by the ETF is used to secure the Proof of Stake (PoS) network through staking. This does come with certain risks, but in return, holders can earn rewards.

Solana ETF stake收益分配：

Grayscale (GSOL): 77% stake rewards are distributed to investors, 23% are retained by Grayscale.

Bitwise (BSOL): 72% stake rewards are distributed to investors, 28% is retained by Bitwise.

Target staking rate: Helius Labs has staked approximately 82% of its Solana holdings, aiming to reach 100%.

Average Annual Yield: Approximately 7%, allowing institutional investors to participate in Solana's native ecosystem.

BSOL outperforms its peers because it offers what most cryptocurrency ETFs still lack: a combination of yield and exposure. Unlike traditional ETFs that only track prices, BSOL's structure allows investors to earn staking rewards and potential price appreciation. Currently, Helius Labs has staked about 82% of its holdings in Solana, with a goal of reaching 100%. This means an average annual yield of up to 7%, enabling institutional investors to engage in Solana's native ecosystem without the operational burden of self-custody or node management.

In addition to the yield, Solana's strong fundamentals have also driven demand. Since the beginning of 2024, the network has maintained nearly perfect uptime, its total value locked in DeFi has doubled this year, and trading volume has surpassed Ethereum. With high throughput, low fees, and real on-chain activity, Solana has become the highest-grossing Layer-1 blockchain. Bitwise Chief Investment Officer Matt Hougan stated, “Institutional investors like ETFs and they like yield. Solana has the highest yield among all blockchains. Therefore, institutional investors prefer the Solana ETF.”

Institutional Demand Expectations and SOL Price Impact

Earlier this week, Ryan Lee, the chief analyst at Bitget exchange, stated that following the launch of the Solana ETF, “Solana could attract between $3 billion to $6 billion in funding within the first year.” He believes that this approval represents a “transformative milestone.” If the ETF can bring $5 billion to $8 billion in new capital to the Solana ecosystem as market analysts predict, then under similar resilient assumptions as with Bitcoin and Ethereum, this could drive Solana's price up by 60% to 120%.

If history can serve as a reference, Solana's price may experience a prolonged revaluation phase after the launch of its ETF, similar to what Bitcoin and Ethereum went through after receiving their respective approvals. Data from K33 Research shows a strong correlation (R² = 0.80) between the capital flow of Bitcoin ETFs and the 30-day Bitcoin return, meaning that ETF inflows can explain about 80% of Bitcoin's price fluctuations. Notably, Ethereum ETFs also exhibit similar behavior.

The conditions for Solana may exacerbate this effect. Currently, about 70% of the circulating supply of SOL has been staked and is unavailable for trading on exchanges. As Bitwise's BSOL ETF stakes all of its held SOL, the expansion of institutional demand will further tighten liquidity. This means that, as the supply base thins, every additional dollar flowing into the Solana ETF will exert upward pressure on the price.

Feasibility Analysis for a $500 Target

In short, if Solana ETF funding inflows continue and the on-chain fundamentals remain strong, SOL is very likely to reach $500 or even higher in the next cycle. Calculating from the current price of $194.67, the $500 target implies an increase of about 157%. This target is not unrealistic as it is built on multiple solid foundations.

Galaxy Research describes Solana as transforming from a speculative asset into an “infrastructure project” that supports the capital market internet, aiming to facilitate the tokenization of real-world assets, DeFi, and consumer-grade financial rails. This narrative aligns perfectly with the institutional goal of seeking scalable and revenue-generating blockchain investment opportunities. With the strongest ETF issuance in 2025, Solana has solidified its position as a revenue powerhouse, attracting demand from institutional investors.

For many years, Solana has been seen as a fast but fragile Ethereum alternative in the cryptocurrency space, with Ethereum being praised for its speed but overlooked for being untested. However, this perspective underwent a significant shift this week. In any case, this $220 million seed round funding helped the net asset value of BSOL rise to $289 million, surpassing several Ethereum and Bitcoin ETFs in the US market rankings. For reference, early Ethereum ETF products took months to reach similar trading activity.