- 21Shares has recently submitted a filing with the United States Securities and Exchange Commission (SEC) to introduce the 21Shares Core Solana ETF.
- This development comes shortly after VanEck’s announcement of a similar spot Solana ETF.
- “We believe this is a necessary step for the crypto industry,” stated 21Shares VP and Head of Legal, Andrew Jacobson.
Discover the latest movement in the crypto world with 21Shares’ application for a new Solana ETF, following the footsteps of VanEck.
21Shares Seeks SEC Approval for Solana ETF
21Shares has officially filed with the SEC to launch its 21Shares Core Solana ETF. This ETF aims to track the performance of Solana (SOL) and seeks to offer a straightforward and cost-efficient way for investors to gain exposure to Solana without holding the asset directly. The ETF, if approved, will be traded on the Cboe BZX Exchange.
ETF’s Structure and Functionality
The primary objective of the 21Shares Core Solana ETF is to replicate the performance of Solana’s native token, SOL, after accounting for the expenses and liabilities associated with the fund. Coinbase Custody Trust Company, a regulated third-party custodian, will hold the SOL tokens. Notably, the ETF will refrain from investing in derivatives, instead focusing on maintaining its SOL holdings to match the value of its shares meticulously.
Operational Management and Valuation
21Shares US LLC, the sponsor of the ETF, is tasked with overseeing trust operations and ensuring the daily valuation of the ETF’s shares. The valuation will be based on an index that reflects the performance of SOL in U.S. dollars. Authorized participants will have the ability to create and redeem shares by depositing cash, which will then be used to purchase SOL from predetermined third-party SOL counterparties. These counterparties are responsible for executing transactions and transferring SOL to the custodian, ensuring the ETF’s share value aligns with its SOL holdings.
Redemption Mechanism and Efficiency
In terms of redemption, the trust plans to transfer SOL back to the counterparties. The counterparties then sell the SOL and return the cash proceeds to the trust. This mechanism allows efficient asset management and provides liquidity to investors. Should Solana be classified as a security and if the ETF sponsors opt not to comply with added regulatory demands, the trust will be terminated, highlighting potential regulatory challenges in the crypto market.
Market Impact and Institutional Involvement
The introduction of the 21Shares Core Solana ETF marks an important milestone in the growing involvement of institutional players in the crypto arena. This ETF, along with VanEck’s, underscores an increasing confidence in Solana’s potential among institutional investors. Moreover, it echoes a broader trend of integrating digital assets into mainstream financial products, providing investors with diversified options for portfolio management.
Conclusion
The proposed 21Shares Core Solana ETF is poised to play a pivotal role in the broader acceptance and integration of digital assets into conventional financial products. Institutional players are showing growing confidence in Solana, and 21Shares continues to pioneer accessible financial solutions centered on crypto assets.
