Bitwise CEO: Solana Could Outperform Ethereum in Staking ETFs

Although Ethereum has a larger market capitalisation than Solana, Bitwise CEO Hunter Horsley suggested that Solana could hold an edge in the staking exchange-traded fund (ETF) sector. He noted that Solana’s network design may be especially attractive to investors looking for staking opportunities, particularly through ETFs.

Staking Withdrawals: Ethereum Delays and Solana’s Advantage

Staking is the process of committing cryptocurrency to help run a blockchain network. In return, investors earn rewards in the same token. However, retrieving staked assets isn’t always instant, and the wait can fluctuate depending on how busy the network is.

In this context, Horsley emphasised that Solana’s faster unstaking process could offer a practical advantage for ETF issuers. While Ethereum’s withdrawal queue has recently reached record levels, Solana’s typically clears more quickly. This speed allows ETFs to return funds to investors without long delays, an important consideration for liquidity management.

Ethereum, for its part, has seen growing delays linked to staking activity. In early September, the entry queue rose to 860,369 ETH, the highest level since 2023. At present, it stands at 195,209 ETH, with an estimated wait of about three days and nine hours.

On the exit side, the queue has reached 2,004,829 ETH, resulting in a withdrawal wait time of roughly 34 days and 19 hours. Overall, the network counts about 1.04 million active validators, with 35.6 million ETH staked, equal to 29.39% of the total supply.

While Ethereum has ways to address these delays, they come with trade-offs. Horsley highlighted Bitwise’s Ethereum staking ETP in Europe, which uses a credit facility to provide liquidity for redemptions, though this method adds costs and has limited capacity. Another option is liquid staking tokens, such as Lido’s stETH, which let investors keep their funds accessible while still earning staking rewards.

Regulatory Momentum for Solana ETFs

According to ETF analyst Nate Geraci, the U.S. Securities and Exchange Commission (SEC) could approve multiple Solana staking ETF applications as soon as mid-October, following updated filings from several firms. Fidelity, Bitwise, Franklin Templeton, VanEck, Canary Capital, Grayscale, and CoinShares have all revised their S-1 filings to include staking features for planned Solana funds.

Amid regulatory momentum, the first U.S. Solana staking exchange-traded fund (ETF), the REX-Osprey Solana Staking ETF, launched in July. On its debut day, the fund drew $12 million in inflows and $33 million in trading volume, signalling strong demand for staking-focused crypto products. These early results suggest Solana staking ETFs may continue to capture significant attention as the market develops.

Meanwhile, in August, the SEC delayed approval decisions for Grayscale Ether staking ETFs until the end of October. The agency also set October 30 as the new date for staking approval on BlackRock’s iShares Ethereum Trust. These postponements could give Solana staking ETFs a potential first-mover advantage in the U.S. market.