Solana ETF: A Guide to Solana-Based Securities

While at the time of writing, there is currently no officially approved Solana ETF in the United States, Solana-based securities currently exist in the US and around the world, including Grayscale’s GSOL and others. These securities offer investors alternative avenues to gain exposure to the Solana ecosystem.

In this blog, we’ll look at what the impact of the Solana ETF could be, as well as some of the current Solana-based securities available.

Before You Dive In

Before we discuss Solana Based securities in more detail, note that you can buy Solana’s native currency SOL on Trust Wallet - a secure, self-custody crypto wallet.

Once you have SOL in your Trust Wallet, you can swap it for Solana meme coins like BONK, TREMP, BODEN, WEN and more, as well as other crypto assets, and you can also stake SOL to earn rewards.

Trust Wallet supports 10M+ assets across 100+ blockchains including crypto. Buy, sell, swap, transfer, and earn crypto all in one place. Trust Wallet is available for mobile app download on iOS, and Android, or you can install the Trust Wallet Extension for your desktop browser.

What Is Solana?

Solana is a high-performance, scalable blockchain platform that supports decentralized applications (dApps) and smart contracts. With its unique proof-of-history consensus mechanism and advanced parallel processing capabilities, Solana delivers fast transaction speeds and low fees, positioning itself as a formidable competitor in the blockchain ecosystem.

As the adoption of cryptocurrencies and blockchain technology continues to grow, investors continue to seek new ways to gain exposure to this innovative space. One avenue that has garnered significant interest is Exchange-Traded Funds (ETFs) based on cryptocurrencies and blockchain platforms like Solana.

Why Is a Solana ETF Important?

The approval of the US spot Bitcoin ETF and Ethereum ETF in the United States has sparked interest and speculation regarding the potential for a Solana ETF in the future. While no official Solana ETF has been approved by the Securities and Exchange Commission (SEC) as of now, the growing popularity and adoption of cryptocurrencies may pave the way for further innovation in this space.

If a Solana ETF were to be approved in the US, it would provide investors with a regulated and accessible way to gain exposure to the Solana ecosystem through traditional investment channels. It is, however, essential to note that the approval and launch of such an ETF would be subject to rigorous regulatory scrutiny and oversight.

What Are Solana-Based Securities?

Solana-based securities are regulated investment products that track the performance of the Solana cryptocurrency (SOL). By investing in a Solana security, investors gain exposure to the Solana ecosystem without directly holding and managing the underlying digital assets. This potential investment vehicle holds promise for several reasons:

• Accessibility: Solana securities give investors a familiar and regulated investment channel, enabling them to access the Solana ecosystem through traditional brokerage accounts and stock exchanges.

• Diversification: Solana securities would offer portfolio diversification opportunities, enabling investors to gain exposure to the rapidly evolving blockchain and cryptocurrency sectors without directly holding the underlying assets.

• Regulatory Oversight: Solana securities are subject to strict regulatory oversight and reporting requirements, providing investors with increased transparency and accountability compared to directly holding cryptocurrencies.

Understanding Solana-Based Securities

Solana-based securities, such as Grayscale's GSOL and the 21Shares Solana ETP (exchange traded product), are financial instruments that track the performance of the Solana cryptocurrency. These securities trade on traditional stock exchanges. This gives investors a regulated, accessible way to gain exposure to the Solana ecosystem without directly holding the underlying cryptocurrency.

Grayscale's GSOL

Grayscale Investments, a leading digital asset management firm, offers the Grayscale Solana Trust (GSOL). This trust holds Solana tokens and enables investors to gain exposure to SOL in the form of a security while avoiding the challenges of buying, storing, and safekeeping SOL directly. Shares based on SOL cryptocurrency are designed to track the SOL market price, meaning less fees and expenses for investors. GSOL is available for accredited investors through over-the-counter (OTC) trading platforms and is subject to strict regulations and reporting requirements.

21Shares Solana ETP

The 21Shares Solana ETP is a publicly traded product that tracks the performance of Solana. The 21Shares Solana ETP is listed on multiple European stock exchanges, including the SIX Swiss Exchange and the Frankfurt Stock Exchange. This ETP (Exchange-Traded Product) provides investors with a regulated and transparent way to gain exposure to Solana without the complexities of directly holding and managing the cryptocurrency.

The Appeal of Solana-Based Securities

Solana-based securities offer several advantages for investors seeking exposure to the Solana ecosystem:

• Regulated and transparent: These securities are subject to strict regulatory oversight and reporting requirements, providing investors with increased transparency and accountability.

• Accessible: Investors can access Solana-based securities through traditional brokerage accounts and stock exchanges, eliminating the need for specialized cryptocurrency wallets or exchanges.

• Diversified: Solana-based securities enable investors to diversify their portfolios by gaining exposure to the Solana ecosystem without directly holding the cryptocurrency.

• Tax Efficient: Depending on the specific security and jurisdiction, Solana-based securities may offer potential tax advantages compared to directly holding cryptocurrencies.

The Difference: Holding Solana-Based Securities vs. Solana Self Custody

While Solana-based securities offer exposure to the Solana ecosystem, it is essential to understand the fundamental difference between holding these securities and directly owning Solana in a cryptocurrency wallet like Trust Wallet.

When holding Solana-based securities, investors do not directly own the underlying Solana tokens. Instead, they hold a financial instrument that tracks the performance of Solana. Investors do not have direct control over the cryptocurrency and cannot directly participate in the Solana network or benefit from its underlying technology.

On the other hand, holding Solana in a crypto wallet like Trust Wallet provides direct ownership and control over the digital assets. Investors can participate in the Solana network, use the cryptocurrency for transactions, and potentially benefit from the technology's future developments and advancements.

The choice between holding Solana-based securities or directly owning Solana in a wallet depends on individual investment goals, risk tolerance, and preference for direct or indirect exposure to the cryptocurrency.

Navigating the Crypto ETF Landscape

As the cryptocurrency market continues to evolve, it is important for investors to stay informed and educated about the various investment vehicles available. For a deeper understanding of the crypto ETF landscape, please refer to our previous article on the significance of the recent SEC approval of spot Ether ETFs in the United States and how this milestone could help drive mainstream adoption of cryptocurrencies.

How to Buy SOL Using Trust Wallet

You can buy crypto, including SOL, using Trust Wallet, via our trusted partners. Here’s how:

• Select “Buy” from the home screen.

• Search for “Solana” or “SOL” and select it.

• Choose the currency you want to use, then enter the amount of SOL you want to purchase.

• Select the third-party provider & payment method you’d like to use.

• Select the Buy button and complete the remaining steps.

Conclusion

Solana-based securities, such as Grayscale's GSOL and the 21Shares Solana ETP, offer investors alternative avenues to gain exposure to the Solana ecosystem. While these securities do not provide direct ownership of Solana tokens, they provide regulated and accessible investment options for those seeking diversified exposure to the Solana cryptocurrency.

Disclaimer: Content is for informational purposes and not investment advice. Web3 and crypto come with risk. Please do your own research with respect to interacting with any Web3 applications or crypto assets. View our terms of service.

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Note: Any cited numbers, figures, or illustrations are reported at the time of writing, and are subject to change.