SEC Eyes Solana ETF: Government Gets Cryptic with Bitwise's Latest Pitch
Published Date: 2/18/2025
Notice
Summary
The Cboe BZX Exchange wants to start trading shares of the new Bitwise Solana ETF, a fund tied to the Solana cryptocurrency. This change lets investors buy and sell these shares on the exchange, making it easier to invest in Solana through a trusted platform. The proposal is open for public comments before it goes live, signaling a fresh way to tap into crypto markets soon.
Analyzed Economic Effects
5 provisions identified: 4 benefits, 1 costs, 0 mixed.
Bitwise Solana ETF Will Be Listed
Cboe BZX filed on January 28, 2025 to list and trade shares of the Bitwise Solana ETF, an exchange-traded fund that will hold SOL (Solana). The Shares will not trade until the Trust's Form S-1 registration statement is effective, and a minimum of 100,000 Shares must be outstanding at the start of listing.
Trust Will Not Stake SOL or Keep Fork/Airdrop Rights
The Trust will not engage in proof-of-stake validation or use any portion of its SOL to earn additional SOL or other income, and it will disclaim incidental rights (for example, from forks or airdrops). That means holders of the ETF will not receive staking rewards or direct fork/airdrop assets from the Trust's SOL holdings.
Custody Protections: Segregated Cold Storage
A third-party Custodian will hold the Trust's SOL in segregated cold storage addresses, safeguard the private keys, and will not loan, hypothecate, pledge, or otherwise encumber the Trust's SOL without the Trust's instruction. The Custodian will record the SOL as the Trust's property in its books and records.
ETF Aims to Reduce Premiums, Fees, and Custody Burden
The Exchange states that approving this proposal could give U.S. investors access to SOL in a regulated ETF that would (i) reduce premium and discount volatility, (ii) reduce management fees through competition, and (iii) provide an alternative to custodying spot SOL.
Daily NAV and Fast Intraday Values Provided
The Trust's NAV will be calculated once daily using the Pricing Benchmark as of 4:00 p.m. ET, and an Intraday Indicative Value (IIV) will be updated every 15 seconds during regular trading hours. The Pricing Benchmark is the CME CF Solana-Dollar Reference Rate—New York Variant and will be calculated every 15 seconds.
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