Author: Cathy, BAIHUA Blockchain
At the end of October 2025, the crypto world witnessed a historic moment. Solana (SOL) broke through the final regulatory barrier, becoming the third crypto asset after bitcoin and ethereum to receive approval for a spot exchange-traded product (ETP) in the United States.
This is not just another “ETF approved” boring headline. Its approval process was full of drama, its product design hides secrets, and the market reaction left countless traders stunned. For those of us in the crypto industry, the arrival of the Solana ETF is not the end of a story, but the beginning of one filled with “insider information” and new opportunities.
01 Wall Street “Civil War”
The “birth” of the Solana ETF was highly unusual. It did not come from a public vote and enthusiastic press release by the SEC (U.S. Securities and Exchange Commission), but happened during the chaos of a U.S. federal government “shutdown.”
During this unique window when regulatory agencies’ functions were limited, two asset management giants—Bitwise and Grayscale—demonstrated remarkable legal acumen. They took advantage of SEC guidelines issued during this period, which allowed S-1 registration statements to become effective automatically without a “delaying amendment.”
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October 28: Bitwise Solana Staking ETF (ticker: BSOL) was the first to land on the New York Stock Exchange (NYSE).
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October 29: Grayscale Solana Trust (ticker: GSOL) followed closely, successfully converting its trust product into an ETP.
This “regulatory blitz” opened a compliant Solana investment channel for trillions of dollars in U.S. institutional capital and retail retirement accounts.
The first week’s data was “heavyweight.” According to U.S. Solana ETPs, the totals were:
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Total net inflow in the first week: $199.2 million
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Total assets under management (AUM) quickly surpassed the $500 million mark.
But the “average” hides the truth. Behind this nearly $200 million inflow was a brutal, winner-takes-all “Wall Street civil war.”
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Winner: Bitwise (BSOL), first week net inflow of $197 million, total AUM (including seed capital): about $420 million.
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Loser: Grayscale (GSOL), first week net inflow: $2.18 million, total AUM (including converted assets): about $101 million.
You read that right. Of the new inflows, Bitwise’s BSOL grabbed almost 99% of the market share. What seemed like a close contest was actually decided on the very first day.
Why was it so one-sided? The answer lies in BSOL’s textbook “three elements of a blitzkrieg”:
Timing (one day faster, win it all): BSOL was listed on October 28 (Tuesday), while GSOL completed its conversion on the 29th (Wednesday). In the ETF world where liquidity is king, Bloomberg analysts pointed out sharply: “Being just one day behind is actually huge. It makes competition much harder.” BSOL successfully defined itself as the “authentic” Solana ETF.
Price (0.20% vs 0.35%): BSOL’s management fee is only 0.20%, and it’s completely free for the first three months or until AUM reaches $1 billion. In contrast, GSOL’s fee is as high as 0.35%. For cost-conscious institutional investors, this 0.15% annualized difference is impossible to ignore.
Product (100% vs 77%): This is the most critical “secret weapon.” BSOL promises in its prospectus to stake 100% of its SOL assets. GSOL, on the other hand, only promises to stake 77% of its assets.
For those outside the crypto circle, this 23% difference may seem trivial. But for insiders, this is exactly what makes the Solana ETF revolutionary.
02 The “Yield-Generating” ETF
The launch of the Solana ETF is structurally more revolutionary than the bitcoin ETF.
The bitcoin ETF is just a “digital gold” safe. You hold it, but it generates no income. Solana, on the other hand, is a proof-of-stake (PoS) asset; holding it (and staking it) is like owning a piece of “digital real estate” that continuously generates rent.
The allure of “yield-generating assets”
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Yield dominance: Solana’s staking annual yield (APY) is between 5% and 7%. This is not only much higher than ethereum’s roughly 2% yield, but also provides institutional investors with a “unique source of income.”
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Narrative shift: Bitwise’s Chief Investment Officer (CIO) Matt Hougan summed it up bluntly: “Institutional investors like ETFs, and they like income. Solana is the highest-income blockchain. Therefore, institutional investors like Solana ETFs.”
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The essence of the product: Investing in a bitcoin ETF is a bet on the price appreciation of “digital gold.” Investing in a Solana ETF, you’re betting on price appreciation and also gaining a considerable cash flow (staking yield) that is uncorrelated with traditional bonds and stocks.
The biggest “Easter egg” is the SEC’s attitude.
When the ethereum ETF was approved in 2024, the word “staking” was absolutely taboo. The SEC was deeply averse to the potential “security” attributes of staking, forcing all issuers to delete related terms overnight.
This time, however, the SEC quietly “let it pass.” It tacitly allowed the listing of the two “staking-included” products, BSOL and GSOL.
This tacit approval marks a major shift in the SEC’s regulatory stance. It opens up a brand-new, trillion-dollar “yield-generating crypto asset” track for Wall Street. Institutions can now not only buy cryptocurrencies, but also use compliant ETF tools to “employ” these cryptocurrencies to work for them (staking for yield). This fundamentally changes the rules of the game.
03 Why Did the Price Plunge Amid “Huge Good News”?
While Wall Street was cheering this ETF victory, all the traders watching the candlesticks were left deeply confused:
If nearly $200 million flowed into the ETF in the first week, why did SOL’s price plunge?
Data shows that after the ETF launch, SOL’s price not only failed to rise, but actually pulled back sharply. On October 30, the price dropped 8% in a single day, and from the recent August high, it had retraced as much as 27%, even dropping to around $163 at its lowest—far below the expected $300.
“Inflow increases, price drops”—this paradoxical phenomenon caught many off guard. But digging deeper into the data, you’ll find this is not a sign of ETF failure, but the result of four powerful forces converging:
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“Buy the rumor, sell the news”: This is the classic script. A large number of short-term traders who had positioned themselves weeks (or even months) before the ETF approval took profits en masse the moment the “news landed.”
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History repeats (bitcoin): This is exactly what happened after the bitcoin ETF launch in January 2024. At that time, BTC’s price also experienced a flat or declining trend (about -5%) after the ETF launch, despite strong inflows. The real rebound came weeks later, after the “sell the news” pressure was fully absorbed.
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Macro “perfect storm”: The timing of the Solana ETF launch was “hell mode.” It coincided with a risk-off wave across the crypto market. During the same week (week of October 27), bitcoin ETFs were experiencing massive outflows of $600 million to $946 million, and the entire market was “bleeding.”
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“Whale” selling: This was the most fatal blow. On-chain data shows that trading giant Jump Crypto, on October 30—the day after BSOL’s listing—swapped 1.1 million SOL (worth about $205 million) for bitcoin.
Now, let’s piece all the clues together:
In a “sell the news” environment, with bitcoin ETF outflows exceeding $600 million—a “perfect storm”—a whale dumped $205 million worth of SOL onto the market.
In a normal market environment, this would be enough to trigger a collapse in SOL’s price.
However, in the last week of October 2025, this massive $205 million sell-off was almost perfectly absorbed by the $199.2 million in new institutional buying brought by the Solana ETF (mainly BSOL).
This is the truth: The inflow into the SOL ETF, in a market that was bleeding overall, demonstrated astonishing “relative strength.” A new group of institutional investors (ETF buyers) directly absorbed the selling from an established institution (Jump Crypto). This is not a bearish signal, but a strong long-term bullish sign. It proves that a powerful, continuous wave of new institutional buying has formed.
04 What’s Next for the Solana ETF?
With ETF approval, Wall Street’s next question is: How much capital can it attract? On this question, there is a huge divide between crypto-native companies and traditional financial giants:
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Bullish camp (crypto-native): Grayscale’s Head of Research Zach Pandl predicts that Solana ETPs could absorb 5% of Solana’s total supply within the next one to two years, which at current prices would mean over $5 billion in inflows.
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Cautious camp (traditional finance): Giant JPMorgan appears “out of step.” In a report, they predict that the Solana ETF will see only $1.5 billion in net inflows in its first year.
Why is JPMorgan so conservative? Their reasoning: “Weaker institutional awareness of Solana” and concerns about “the growing dominance of meme coin trading” on its network.
JPMorgan’s concerns reflect the general anxiety of traditional finance: Is Solana a high-tech financial infrastructure, or just a “meme coin casino” full of speculators?
However, just two days after the ETF listing, the entry of “new money” completely ended the debate over whether Solana is a “casino or infrastructure.”
On October 30, 2025, global payments giant Western Union announced a major strategic move: Western Union has chosen the Solana blockchain as the issuance network for its new stablecoin—U.S. Dollar Payment Token (USDPT)—scheduled for launch in the first half of 2026.
In its announcement, Western Union made it clear that it chose Solana for its “high performance,” “high throughput, low cost, and instant settlement.”
This news is far more impactful than the ETF. It perfectly answers JPMorgan’s doubts. You don’t build a global remittance network on a “meme coin casino.” Western Union betting its future core business on Solana is the strongest endorsement of Solana’s “financial infrastructure” attributes.
05 Summary
The approval of the Solana ETF is not an endpoint, but the starting gun for a new era. It clearly demonstrates two parallel tracks for institutional adoption of Solana:
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Financialization track (ETF): Wall Street asset managers (like Bitwise) are packaging SOL (the token) into a “yield-generating” financial asset and selling it to their institutional clients.
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Infrastructure track (Western Union): Global enterprises (like Western Union) are using Solana (the network) as a “low-cost” financial infrastructure to build their core businesses.
These two tracks will reinforce each other. Western Union’s adoption provides the strongest fundamental support for institutions buying the ETF; while the massive AUM and professional staking brought by the ETF (Bitwise’s “New Wall Street” narrative) in turn provide a safer, more stable network for builders like Western Union.
While JPMorgan is still worried about “meme coins,” Bitwise and Western Union have already proven with their actions: Solana is not only the “New Wall Street,” it is also the “new infrastructure” for Wall Street and global payments. The flywheels of financialization and infrastructuralization are now spinning faster and faster.
