Solana News Update: CoinShares Drops Altcoin ETFs While Mainstream Finance Leads in Inflows
CoinShares Withdraws U.S. Applications for Solana, XRP, and Litecoin ETFs
CoinShares, a prominent digital asset management firm overseeing $10 billion in assets, has unexpectedly pulled its applications for Solana (SOL), XRP, and Litecoin exchange-traded funds (ETFs) in the United States. The company attributed this move to an overcrowded market, where established financial institutions such as BlackRock, Fidelity, and Bitwise command over 90% of crypto ETF inflows. This decision, disclosed in a November 28 SEC filing, signals a strategic reassessment as CoinShares faces the challenge of competing against dominant industry players.
Jean-Marie Mognetti, CEO of CoinShares, highlighted the significant obstacles smaller issuers encounter in an environment where innovation is often stifled by larger, entrenched firms. As a result, CoinShares is shifting its focus toward thematic crypto baskets and more actively managed investment strategies to better position itself in the evolving market.
Altcoin ETF Performance and Market Trends
This withdrawal comes after a period of volatility for altcoin ETFs. Since their introduction on October 28, Solana-based funds have attracted $570 million in net inflows. In contrast, Bitcoin ETFs experienced significant outflows, losing $3.79 billion in November 2025, reflecting shifting investor preferences. Solana staking ETFs, which offer 7% yields and reduced fees, have outperformed their Bitcoin counterparts even as the broader crypto market faced declines. Despite these successes, Solana's price dropped to $137.83 in mid-November, marking a 60% decrease from its January 2025 high and illustrating the disconnect between ETF inflows and token prices.
Litecoin's ETF has struggled even more, registering no net inflows for five consecutive days and managing only $7.44 million in assets, indicating limited investor interest. In comparison, XRP and Solana ETFs saw inflows of $586 million and $570 million, respectively, leaving Litecoin's product as an outlier. CoinShares' decision to discontinue its Litecoin ETF reflects broader skepticism about Litecoin's competitiveness compared to smart contract platforms and Bitcoin's reputation as a store of value.
Regulatory and Structural Challenges
CoinShares' withdrawal from the Solana staking ETF market also points to ongoing structural hurdles. Although there are currently seven active SOL ETFs in the U.S., CoinShares' application was retracted due to unresolved structuring concerns, with the SEC noting that the fund was never formally registered. Market analysts believe CoinShares may explore alternative ways to offer Solana exposure, especially given its strong presence in European crypto ETPs and a 34% market share in that segment.
Strategic Refocus and Industry Competition
The company's strategic pivot is further influenced by its upcoming Nasdaq SPAC merger, prompting a reevaluation of its product lineup. CoinShares is now prioritizing innovative solutions, such as active management and thematic investment baskets, to stand out in a saturated market. Meanwhile, competitors like 21Shares and REX-Osprey are expanding their altcoin ETF offerings, with 21Shares preparing to launch an XRP ETF on November 29.
Outlook for Altcoin ETFs
CoinShares' exit highlights the precarious nature of altcoin ETFs amid regulatory ambiguity and ongoing market volatility. While Solana ETFs have demonstrated some resilience, continued institutional outflows and falling prices indicate that investor caution persists. The firm's withdrawal underscores the increasing influence of traditional financial institutions in the crypto ETF space, as smaller firms seek new strategies to remain competitive.
