Solana ETF Defies Market Downturn with $545M Inflows as Bitcoin and Ethereum Funds Bleed Assets

A Surprising Shift in ETF Demand

While Bitcoin and Ethereum funds have been shedding assets, Bitwise's new Solana ETF has racked up more than $126 million in net inflows in its first full week of trading. This represents an auspicious sign for the SOL-tracking product and potentially for other altcoin funds.

Impressive Inflows Despite Market Conditions

The Bitwise Solana Staking ETF (BSOL) has generated more than $545 million in net inflows since its October 28 debut on the New York Stock Exchange, including $223 million in seed investments. BSOL's share price closed up 5% in Friday trading.

"Inflows every day for the last 8 days since its launch," crypto asset manager Bitwise CEO Hunter Horsely wrote in an X post. "Over $500,000,000 in total. It's clear investors want Solana exposure."

Market Context and Performance

Over the same period, the 11 spot Bitcoin ETFs have lost more than $2.1 billion in assets, while net outflows for the nine Ethereum funds have totaled $579 million. The Bitwise Solana fund's promising start comes even as SOL's price has been dropping, part of a market-wide downturn tied to a government shutdown and other macroeconomic uncertainties.

Solana was recently trading at $156, off more than 16% for the past week and nearly 29% over the last month. Bitcoin has declined about 16% since early October when it rose to a record high above $126,000.

Expert Analysis and Market Sentiment

In a text to Decrypt, etf.com Senior Analyst Sumit Roy wrote "the (Solana) inflows make sense," noting the token's massive $90 billion market value: "Solana has a devoted following, arguably the most devoted following after Bitcoin and Ethereum."

He added: "It wouldn't be surprising to see Solana ETFs collectively account for 5% of that market cap at the very least. So in that context, $500M is still small. The fact that BSOL launched with 100% staking certainly made it more attractive as well."

Regulatory Background and Future Prospects

The listing of the Bitwise fund and a Grayscale Solana ETF last week surprised some hopeful observers, who had feared the current government shutdown would delay a regulatory process that had already taken months.

But the NYSE certified 8-A filings that offered the fund managers an alternative route to the recent ETF approval process. The Grayscale Solana Trust ETF (GSOL) has received about $114 million in net inflows, most of them in seed investments.

Last week, spot Litecoin and Hedera funds from Canary began trading after the Nasdaq certified their 8-A submissions. Other altcoin-focused funds benefiting from the same SEC rule change may soon also be available to investors.

What's Next for Crypto ETFs?

In a Thursday filing to the agency, Bitwise removed a "delaying amendment" from its S-1 prospectus for the Bitwise Dogecoin ETF. The fund could begin trading in as few as 20 days from the submission if the SEC doesn't object.

"Looks like Bitwise is doing the 8(a) move for their spot Dogecoin ETF, which basically means they plan on going effective in 20 days barring an intervention," Eric Balchunas wrote in an X post on Thursday.