The truth behind the approval of Solana ETF: Why did $19.9 billion flow in but failed to pump the coin price?

At the end of October, the approval of the Solana ETF became a major event in the encryption world. However, this story is far more complicated than it seems.

The Silent War of Wall Street

The birth of the Solana ETF is quite special. It did not go through SEC public voting, but quietly launched during the “shutdown” of the US government — this provided Bitwise and Grayscale with an excellent opportunity.

• October 28: Bitwise Solana Staking ETF (BSOL) makes its debut on the New York Stock Exchange
• October 29: Grayscale Solana Trust (GSOL) closely followed by the conversion launch.

The first week's report card is explosive:

• Total net inflow: 199.2 million USD
• Total AUM: 500 million +

But behind this number is a “winner-takes-all” bloodbath:

• BSOL won big: 197 million in new inflows, total AUM reached 420 million (accounting for 99% of new inflows)
• GSOL was bloodbath: only 21.8 million added, total AUM about 100 million

Why can BSOL completely crush its competitors? Three killer moves:

1. Time Advantage — Being a day early means everything. In the liquidity-driven ETF market, Bloomberg analysts put it plainly: “Being a day late is like being in a different world.”

2. Low Fees — BSOL is only 0.20%, free for the first 3 months or until AUM reaches 1.1 billion; GSOL is 0.35%. For institutional investors, a 0.15% annual difference = huge cost difference.

3. Product Innovation — This is key. BSOL commits 100% of assets to staking, while GSOL only dares to promise 77%. This is not a minor detail; it is a revolutionary difference.

Why “Yield ETF”?

The place where Solana ETF is better than Bitcoin ETF is here:

BTC ETF = “Digital Vault”, you hold it but have no returns.

SOL ETF = “digital real estate”, which can not only appreciate but also generate staking rent.

Key data:

• Solana Annual Yield: 5-7% (far exceeding Ethereum's ~2%)
• A Major Shift in Institutional Perspective: Bitwise Investment Director Matt Hougan summed it up perfectly - “Institutions like ETFs, they like cash flow. Solana is the most profitable chain. So institutions love Solana ETFs.”

The SEC's change in attitude is also very interesting. When approving the Ethereum ETF in 2024, the term “staking” is absolutely taboo. Now the SEC not only defaults on it but also allows two staking products (BSOL and GSOL) to pass the review. This marks a fundamental shift in the SEC's attitude towards “yield encryption assets” — opening up a new market worth trillions for Wall Street.

Did the coin price drop instead? Is this a bug or a feature?

This is the strangest thing: nearly $200 million flowed in, but the price of SOL fell instead of rising.

On October 30, it plummeted 8% in a single day, down 27% from the August high, hitting a low of $163 (far below the expected $300).

But this is not a failure signal for the ETF, but rather a perfect collision of four forces:

1. Sell on good news — A classic strategy. Traders who bought in a few weeks ahead immediately take profits and exit when the news is released.

2. History Repeats — This was also the case when the Bitcoin ETF launched in January 2024, with BTC first falling and then rising; the real upward trend came only after digesting the sell-off.

3. Macroeconomic Risk — At the same time as the launch of the Solana ETF, the Bitcoin ETF experienced a net outflow of 600 million to 946 million dollars, causing the entire market to “bleed out”.

4. Whale Dump — The most powerful blow. On-chain data shows that trading giant Jump Crypto sold 1.1 million SOL (approximately $205 million) all for BTC in one go on October 30 (the day after BSOL went live).

Considering these factors together: amid the “sell the news” wave, under macro risks, a whale dumped $205 million, which was almost completely absorbed by the $199.92 million new inflows into the Solana ETF.

What does this indicate? The purchasing power of institutional new buyers is directly combating whale sell-offs, and the two are evenly matched. This is not bearish; it is a strong long-term bullish signal—demonstrating that a powerful and stable institutional demand truly exists.

Next Stop: Institutional Controversy vs. Reality Proof

There is a significant division within Wall Street regarding how much capital the Solana ETF can attract:

Optimists (within the encryption circle) — Grayscale Research Director Zach Pandl predicts that the SOL ETP can absorb 5% of the Solana supply within 1-2 years, exceeding $5 billion at current prices.

Cautious Party (JPMorgan) — Only predicts a net inflow of $1.5 billion in the first year. The reasons are “Solana's institutional awareness is weak” and “meme coin trading is consuming the ecosystem.”

JPMorgan's concerns represent a typical anxiety of traditional finance: Is Solana a high-tech financial infrastructure, or a meme coin casino?

But just two days after the ETF went live, reality provided the answer.

Western Union's “endorsement” completely rewrites the narrative

On October 30th, global payment giant Western Union announced a strategic decision: to choose Solana as the issuing chain for its new stablecoin U.S. Dollar Payment Token, with plans to launch in the first half of 2026.

Western Union's statement clearly outlines the reasons for choosing Solana: “high performance”, “high throughput, low cost, instant settlement”.

The significance of this news goes beyond the approval of the ETF itself. It fundamentally answers JPMorgan's question - the global payment network will not be built on a casino. Western Union has validated through action that Solana is transforming from a speculative asset into real financial infrastructure.

Two tracks exerting force simultaneously

Now the institutional adoption of Solana is showing two parallel tracks:

Financial Track — Asset management companies like Bitwise package SOL into “yield-bearing assets” and sell them to institutional clients and pension funds.

Infrastructure Track — Global giants like Western Union use Solana as their “cheap payment infrastructure layer” to build core businesses.

These two tracks reinforce each other: the large AUM of ETFs and professional staking provide a more stable and secure ecosystem for enterprises like Western Union; conversely, the application of real enterprises like Western Union gives ETF buyers stronger “fundamental” support.

Summary

The approval of the Solana ETF is not the end, but the beginning. It clearly demonstrates two ways for institutions to enter the market:

• As assets packaged by Wall Street into financial products
• As infrastructure is practically applied by global enterprises

While JPMorgan is still worried about meme coins, Bitwise and Western Union have already proven with data and actions that Solana is not only the new Wall Street but also the new global payment infrastructure. This flywheel has already started to turn.