Bitwise CEO Hunter Horsley believes Solana (SOL) may possess a competitive advantage over Ethereum (ETH) in the race to launch staking Exchange Traded Funds (ETFs) in the United States. This assertion is primarily based on Solana's faster unstaking period, which could be more appealing to investors.
Solana's Staking Edge
Horsley highlighted a critical difference between the two blockchain networks: the speed at which staked assets can be withdrawn. Ethereum's withdrawal queue has recently reached new highs, while Solana's typically clears much faster. According to onchain data, as of early October 2025, the ETH staking queue stands at 201,984 ETH, with an average wait time of about three days. The exit queue, however, is far longer, roughly 34 days, with more than 2 million staked tokens awaiting withdrawal. This difference in withdrawal times matters to ETF issuers who need to be able to return assets to investors quickly. "It's a huge problem," Horsley stated, emphasizing the challenges posed by Ethereum's longer unstaking period.
Workarounds for Ethereum
Despite the withdrawal queue issues, Horsley noted that Ethereum-based products can work around the problem. For example, Bitwise's Ethereum staking exchange-traded product (ETP) in Europe uses a credit facility to maintain liquidity for redemptions. However, these facilities come with costs and "capacity constraints". Another alternative is liquid staking tokens like Lido's stETH, which represent staked assets and allow investors to remain liquid while still earning rewards.
ETF Filings and Potential Approvals
Several asset managers, including Franklin Templeton, Fidelity Investments, CoinShares, Bitwise Asset Management, Grayscale Investments, VanEck, and Canary Capital, have filed amended S-1 documents with the SEC for spot Solana ETFs. These filings include staking, which some analysts believe bodes well for spot ETH ETF staking. ETF analyst Nate Geraci, president of NovaDius Wealth Management, anticipates that several applications for Solana staking ETFs could receive US approval by mid-October.
Growing Institutional Interest in Solana
There is a growing institutional appetite for Solana-linked investment products. The REX-Osprey Solana Staking ETF, launched in July 2025, has already attracted significant inflows. Bitwise also reported substantial inflows into its European Solana Staking ETP. Matt Hougan, Bitwise Chief Investment Officer, has stated that Solana "has all the ingredients for an epic end-of-year run," citing the network's strong activity and growing institutional participation as key drivers for its potential growth.
Ethereum ETFs
The Ethereum ETF space has also seen significant activity. On September 25, 2025, REX Shares and Osprey Funds announced the launch of the first U.S. Ethereum ETF with staking. The fund, trading under the ticker ESK, gives investors exposure to ETH while also earning staking rewards. BlackRock, Fidelity, and Franklin Templeton also have applications under review by the SEC to add staking to their ether-based ETFs.
Bitwise's Involvement
Bitwise has been actively involved in both Ethereum and Solana ETFs. The Bitwise Ethereum ETF (ETHW) is a low-cost Ethereum fund that holds ether (ETH). Bitwise has also filed for a spot Solana ETF. Additionally, Bitwise offers a Bitwise Physical Solana ETP in Europe, designed to provide investors with exposure to the price performance of SOL.
Regulatory Landscape
The SEC's stance on crypto ETFs has been evolving. The agency recently approved generic listing standards for crypto ETFs, streamlining the path for crypto exchange-traded products beyond Bitcoin and Ethereum. This move could reduce approval times for new ETFs.
Potential Market Impact
The approval of Solana ETFs, particularly those with staking features, could have a significant impact on the cryptocurrency market. Some analysts believe that it could be a catalyst for a broader altcoin season. The regulated, reward-focused structure of these ETFs may attract investors who have previously avoided crypto due to security, custody, or compliance concerns.
