Solana ETF could attract $3 billion in the first year as altcoin funds make historic debut on Wall Street

The first exchange-traded funds (ETFs) in the U.S. for Solana, Hedera, and Litecoin began trading on Tuesday on the New York Stock Exchange and Nasdaq, marking a historic expansion of regulated cryptocurrency investment options beyond Bitcoin and Ethereum — and doing so despite an ongoing federal government shutdown that has left the Securities and Exchange Commission largely inoperational.

If the initial momentum holds and historical patterns repeat, the Solana ETF could attract more than $3 billion in inflows during the first 12 to 18 months of trading, according to projections from Bloomberg Intelligence ETF analyst James Seyffart. The development represents the most significant widening of access to crypto ETFs since the launch of Bitcoin and Ethereum products in 2024.

The Bitwise Staking ETF for Solana (BSOL) debuted on the New York Stock Exchange with $10 million in trading volume during its first 30 minutes, according to Eric Balchunas of Bloomberg Intelligence. Meanwhile, on Nasdaq, the Canary Capital Hedera ETF (HBR) recorded $4 million and its Litecoin ETF (LTCC) recorded $400,000 in early trading activity.

Balchunas projected that BSOL would reach approximately $52 million in total volume by the end of the day, with HBR and LTCC expected to reach $8 million and $7 million respectively. Although these figures pale in comparison to Bitcoin's stunning debut, market observers emphasized that for altcoin products, the launch represents a significant achievement.

“A good frame of reference is to observe the size of Solana in relation to bitcoin and Ethereum,” Seyffart explained. “The market capitalization of Solana is 5% of that of Bitcoin and 22% of that of Ethereum. If they maintain the flows we've seen for the ETH and BTC ETFs on a relative basis, that would amount to over $3 billion in flows during the first 12 to 18 months.”

Context: Bitcoin and Ethereum Reach a High Level

The projections are based on the extraordinary success of previous cryptocurrency ETF launches. When spot Bitcoin ETFs debuted in January 2024, they collectively attracted approximately $655 million in net flows on their first day across multiple issuers, with trading volumes reaching billions of dollars.

The Ethereum spot ETFs, which launched in July 2024, saw $106.7 million in net flows on the first day, with over $1 billion in accumulated trading volume. Although these figures were approximately 16-24% of Bitcoin's debut metrics, analysts still characterized the launch of Ethereum as very successful compared to traditional ETF standards.

The altcoin launches on Tuesday initially featured only one issuer per asset, although the conversion of the Grayscale Solana Trust to the ETF format is scheduled to begin trading on Wednesday. This staggered launch differs from the simultaneous debuts of multiple issuers that characterized the launches of Bitcoin and Ethereum ETFs.

A Technical Path Through Regulatory Indefinition

The launches occurred through an unconventional regulatory pathway amid the U.S. government shutdown, which has left SEC staff unable to actively review new filings. However, the funds took advantage of the automatic effectiveness provision of the Securities Act of 1933, which allows S-1 registration statements to become effective automatically after 20 days if no delay amendment is filed.

The products are structured under Section 1933 instead of the Investment Company Act of 1940 — a regulatory framework commonly used for commodity-based ETFs. This '33 Act structure does not require a board of directors or daily portfolio disclosure, making it a streamlined format for single-asset cryptocurrency funds.

Fox Business journalist Eleanor Terrett confirmed that the issuers had included specific language in their filings that allows for automatic effectiveness, enabling them to proceed with the listings even while government operations remained suspended. Both the NYSE and Nasdaq certified the necessary 8-A filings under the Securities Exchange Act of 1934, completing the regulatory requirements for stock trading.

Bitwise Leads with Competitive Commission Structure

Bitwise's BSOL stands out through an aggressive fee strategy and staking integration. The fund has a management fee of 0.20% — described by the firm as one of the lowest in the space — but waives fees entirely for the first three months or until assets reach $1 billion, whichever comes first.

Critically, BSOL aims to stake 100% of its SOL holdings through Bitwise Onchain Solutions, powered by the Helius validator. This staking integration aims for participation in approximately 7% of the average annual staking rewards of Solana — a feature absent in Bitcoin ETF products and initially absent in Ethereum ETF products.

“Investors like the growth potential, and investors like the rewards of staking,” said Bitwise CEO Hunter Horsley. “BSOL provides low-cost exposure to both. We are excited to create high-quality access to one of the most used blockchains in crypto: Solana.”

The staking component addresses one of the main criticisms against previous Ethereum ETFs, where the lack of staking functionality disappointed many institutional investors used to earning yield on their holdings. By incorporating staking from launch, Bitwise positions BSOL as a more comprehensive product that captures both price appreciation and protocol rewards.

Lower Market Capitalizations Point to Lower Income Expectations

While Seyffart's projection of $3+ billion for Solana seems optimistic, his analysis suggests significantly lower figures for Hedera and Litecoin based on their relative market capitalizations. “The market capitalization of HBAR is approximately 8% the size of Solana while Litecoin is 7% of Solana,” noted Seyffart. “So it will likely be much smaller. Again, time will tell.”

Using the same proportional analysis that generated the Solana projection, HBAR could potentially attract $240-300 million in 12-18 months, while Litecoin could see $210-250 million — assuming they follow proportional ETF flow patterns to their market capitalizations.

The CEO of Canary Capital, Steven McClurg, described the debut of Litecoin as “another historic moment in what has been a pivotal year for the crypto industry,” noting that “Litecoin has demonstrated a proven track record of security and reliability with significant enterprise-class use cases.”

According to data, CoinDesk Indices provides price benchmarks for both HBR and LTCC, establishing reference rates that ensure ETFs accurately track their underlying assets. Both funds hold their respective cryptocurrencies directly through qualified custodians such as Coinbase Custody and BitGo.

Broader Implications for the Structure of the Crypto Market

The successful launch of altcoin ETFs represents more than just new investment vehicles — it signifies a fundamental shift in how institutional capital can access the cryptocurrency markets. The expansion beyond Bitcoin and Ethereum acknowledges that blockchain networks serving different purposes and ecosystems deserve representation in traditional financial markets.

Market observers note that the relative success or failure of these products will likely influence the approval outlook for other pending altcoin ETF applications. Multiple issuers have applied for XRP spot ETFs, with Bloomberg analysts reportedly assigning a 98% probability of approval. Additional applications for Dogecoin, Polkadot, and other major cryptocurrencies are being considered.

The staggered nature of these approvals — with Solana, Hedera, and Litecoin moving ahead of other assets — seems driven by a combination of factors including submission dates, regulatory clarity, and the technical characteristics and decentralization profiles of the networks.

“2025 has been a turning point for crypto,” Horsley noted. “Finally, it is rapidly being accepted as a conventional alternative asset class. The launch of BSOL today is another milestone, opening the door for investors to participate in one of the most widely used and fastest-growing technology platforms in the space.”

Final reflections

With the Grayscale Solana Trust scheduled to convert on Wednesday, the competitive landscape for exposure to Solana will immediately expand. Grayscale brings brand recognition and an existing investor base thanks to its years operating as a closed-end trust, although its conversion is likely to trigger some exits when early investors who held shares at premiums or discounts exit their positions.

The pattern of conversions triggering initial outflows before stabilizing was evident both with Bitcoin's GBTC and Ethereum's ETHE, which experienced over $1.5 billion in net outflows during the first week of the Ethereum ETF. However, excluding these conversion-related outflows, the new ETF products consistently demonstrated strong institutional demand.

Several other issuers, including VanEck, 21Shares, Franklin Templeton, and additional Grayscale products, have filed or indicated intentions to file applications for Solana, Hedera, and Litecoin ETFs. The eventual competitive landscape could feature 5 to 10 products per asset, reflecting the markets for Bitcoin and Ethereum.

For investors, the key question remains whether altcoin ETFs can replicate even a fraction of Bitcoin's extraordinary success. BlackRock's IBIT accumulated over $37 billion in assets during 2024, becoming the third largest ETF launch in history and demonstrating an unprecedented institutional appetite for exposure to cryptocurrencies.

As trading continues, market participants will observe not only the volume and flow data but also the impact on the prices of the underlying tokens, changes in institutional ownership patterns, and whether the ETF format successfully attracts capital that would otherwise not enter the cryptocurrency markets through direct token purchases.

The launch of these products amid a government shutdown adds an unusual footnote to the cryptocurrency market story, demonstrating how technical provisions in securities law can enable market innovation even when regulatory agencies are not operational.