Following the recent launch of its own Solana ETF, VanEck, 21Shares has applied to the U.S. Securities and Exchange Commission (SEC) to launch the 21Shares Core Solana ETF. The ETF aims to track the performance of Solana (SOL) and provide investors with a convenient and cost-effective way to gain exposure to SOL without directly investing in it.
If approved, the 21Shares Core Solana ETF will trade on the Cboe BZX Exchange. The ETF’s objective is to reflect the performance of Solana’s native token, SOL, and adjust accordingly based on the fund’s expenses and liabilities.
The SOL held by the ETF will be custodied by Coinbase Custody Trust Company, a regulated third-party custodian. The ETF will not directly invest in derivatives and aims to maintain its holdings in SOL to match its net asset value.
The sponsor, 21Shares US LLC, will oversee the operation of the trust and ensure that the ETF’s shares are valued daily based on an index reflecting SOL’s performance against the U.S. dollar.
Authorized participants can create and redeem shares by depositing cash with the trust. The cash is then used to purchase SOL from a designated third-party, known as the SOL counterparty, who will facilitate the transaction and transfer the SOL to the trust’s custodian. This process ensures that the ETF’s shares accurately reflect the value of the SOL held.
The trust plans to redeem shares by transferring SOL to the counterparty, who will sell the SOL and deposit the cash proceeds back into the trust. This approach allows the trust to effectively manage its assets while providing liquidity for investors.
The filing includes provisions that if Solana is deemed a security and the ETF sponsor chooses not to comply with additional regulatory requirements, the trust will be terminated. This highlights the ongoing regulatory uncertainty in the cryptocurrency market.
Andrew Jacobson, Vice President and General Counsel of 21Shares, stated in a prepared statement shared with Decrypt, “21Shares is excited about the potential to launch an ETF in the United States that can access the Solana ecosystem. We believe this is a necessary step for the cryptocurrency industry and aligns with our mission to bring cryptocurrency-centric, accessible financial products to market.”
The proposed launch of the 21Shares Core Solana ETF marks an important step in the growing trend of institutional participation in the cryptocurrency industry. Following VanEck’s application, this ETF demonstrates increasing confidence from institutional investors in the potential of Solana.
It also reflects a broader trend of integrating digital assets into mainstream financial products, providing investors with more diversified portfolio management options.
Editor’s note: This article has been updated after publication to include comments from 21Shares.