Wednesday’s expected launch of the first US-based Solana staking exchange-traded fund will serve as a “litmus test” for institutional interest in altcoin ETFs and staking, according to Presto Research.
On Tuesday, Peter Chung and Min Jung argued in a research note that the launch will show if US-based Ethereum ETFs’ lacklustre performance since their launch were due to that specific blockchain or a lack of altcoin appetites.
“A strong market response to the Solana ETF would challenge this, suggesting that Ethereum ETFs’ struggle stems from chain-specific issues rather than a flawed investment thesis,” they wrote.
Apart from offering exposure to Solana, the fund will also offer yield from staking.
“A robust response would signal that yield matters for institutional investors,” they wrote.
Chung and Jung said $150 million inflow for the fund in the first month of trading would constitute a “solid start.”
Altcoin ETFs
Their comments highlight not just the anticipation surrounding the wave of altcoin ETF applications the Securities and Exchange Commission is currently processing, but also Ethereum’s ongoing woes, which have seen it underperform over the past year compared to other cryptocurrencies.
The expected Solana staking ETF is issued by Rex Shares and Osprey Funds.
On June 27, they announced that their Rex-Osprey Solana staking ETF will begin trading on Wednesday after getting the green light from the SEC.
This is not, however, the first Solana-based ETF. Volatility Shares launched two futures Solana ETFs in March.
Ethereum’s inflows
Bitcoin ETFs, launched last year, amassed $107 billion in assets under management in their first year, becoming the most successful ETF launch ever.
The vehicle has continued to attract massive institutional interest, which also catapulted Bitcoin’s price to a new all-time high above $111,000 in May.
Ethereum ETFs, by contrast, have only amassed $4 billion in inflows during their first year of trading.
The big ETF news that everyone seems to be waiting is when and if the SEC will approve the raft of spot altcoin ETFs it’s currently reviewing. The applications include Solana, XRP, and Litecoin, as well as memecoins like Dogecoin and Pengu.
Bloomberg ETF analysts James Seyffart and Eric Balchunas say they expect “a wave of new ETFs” in the year’s second half. They predict that Litecoin, Solana, and XRP ETFs have the greatest chances of approval this year.
Staking ETFs like the Rex-Osprey fund were boosted by the SEC ruling in May that such offerings did not violate securities law.
Crypto market movers
- Bitcoin is down slightly by 1.1% over the past 24 hours and is at $106,585.
- Ethereum is down 0.5% and is at $2,447.
What we’re reading
- Polygon Labs launches Katana blockchain with focus on DeFi ― DL News
- Ethereum’s Vitalik Buterin Warns Worldcoin’s Biometric IDs Threaten Privacy ― Unchained
- We’ve reached a macro turning point — Milk Road
- Hyperliquid Reignited Interest in Crypto Perps. Can Coinbase and Robinhood Capitalize? ― Unchained
- Robinhood unveils EU crypto rollout, tokenised stocks, staking, and in its own blockchain ― DL News
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.