tl;dr
The first wave of non-Bitcoin, non-Ethereum altcoin ETFs launches in the U.S., signaling institutional investors' growing interest in diversifying crypto exposure beyond dominant assets. The launch includes Solana, Hedera, and Litecoin ETFs, with staking features offering yield-generating opportunit...
**First Wave of Altcoin ETFs Launch, Marking a New Era for Institutional Crypto Investment**
On October 28, four altcoin exchange-traded funds (ETFs) will begin trading in the U.S., signaling a pivotal moment for cryptocurrency markets. This marks the first wave of non-Bitcoin, non-Ethereum spot crypto ETFs, potentially triggering a shift in investor focus from the two largest cryptocurrencies to a broader range of altcoins after months of market consolidation.
The launch was confirmed by Bloomberg senior ETF analyst Eric Balchunas, who noted that the NYSE and Nasdaq had posted listing notices for the Bitwise Solana Staking ETF. Bitwise later confirmed that the ETF, named BSOL, will start trading on the specified date. Grayscale’s Solana ETF is also set to convert the following day, with Balchunas expressing confidence in the approvals, stating, “Assuming there’s not some last-minute SEC intervention, looks like this is happening.”
Canary Capital CEO Steven McClurg added to the momentum, announcing that the firm’s spot HBAR (Hedera) and LTC (Litecoin) ETFs will begin trading on Nasdaq. McClurg told journalist Eleanor Terrett, “Litecoin and Hedera are the next two token ETFs to go effective after Ethereum. We look forward to launching tomorrow.” This underscores growing institutional interest in diversifying crypto exposure beyond the dominant assets.
**Infrastructure for Institutional Adoption**
The approvals are not just about new products but also about the groundwork laid by crypto infrastructure providers. Thomas Uhm, chief commercial officer at Jito, emphasized that the launch validates months of operational efforts. “The approval of staked Solana ETFs is a significant step for institutional access to crypto,” he stated, highlighting Jito’s work in integrating with qualified custodians, building liquidity across exchanges and over-the-counter (OTC) markets, and addressing regulatory and accounting challenges.
Jito’s JitoSOL liquid staking token (LST) plays a central role, operating within REX’s SSK product and being the only Solana LST with a full LST ETF application from VanEck. Uhm stressed the importance of relationships with authorized participants, liquidity providers, and market makers, noting that Jito has “been in the rooms that matter” to educate institutions on the benefits of liquid staking.
**Staking Differentiates Solana from Ethereum ETFs**
A key distinction between Solana’s ETFs and the Ethereum spot ETFs launched in July 2024 is the inclusion of staking features. Ethereum’s ETFs lacked staking due to regulatory concerns, whereas Solana’s approach leverages staking to offer yield-generating opportunities. This innovation could attract institutional investors seeking both exposure and returns.
Uhm positioned the launch as a starting point, revealing ongoing collaborations with “tier 1” investment banks and major hedge funds to develop related products. The October 28 launches follow months of issuer applications and SEC reviews, reflecting the regulatory hurdles and careful planning required to bring these products to market.
**Implications for the Crypto Market**
The expansion into altcoins tests whether institutional demand extends beyond Bitcoin and Ethereum. Analysts are closely watching if regulated products can absorb the supply of these assets without triggering the volatility that has historically plagued altcoin rallies.
As the crypto market evolves, these ETFs represent a critical step toward mainstream adoption, blending traditional finance mechanisms with blockchain innovation. With institutional players like Bitwise, Grayscale, and Jito leading the charge, the altcoin ETF wave could redefine how investors engage with digital assets, paving the way for a more diversified and stable crypto ecosystem.