Grayscale Files for Spot Solana ETF on NYSE Arca

Grayscale Investments has taken a significant step towards expanding its digital asset offerings by filing an S-1 registration statement with the Securities and Exchange Commission (SEC) to launch a spot Solana ETF on NYSE Arca. The trust, named Grayscale Solana Trust (SOL), aims to track the price of SOL using the CoinDesk Solana Price Index. This move is part of Grayscale's broader strategy to enhance its presence in the digital asset space, following the submission of a new S-1 document to rename its investment product, Grayscale Solana Trust (GSOL).

The filing indicates that the trust will hold SOL, which are digital assets based on an open-source cryptographic protocol existing on the Solana Network. The trust's investment objective is to ensure that the value of its shares reflects the value of SOL held by the trust, less expenses and other liabilities. The trust will not utilize leverage, derivatives, or similar arrangements in seeking to meet its investment objective.

Grayscale Investments Sponsors, LLC and Grayscale Operating, LLC are the co-sponsors of the trust. Prior to May 3, 2025, all references to the "Sponsor" include both sponsors unless the context otherwise requires. On or after May 3, 2025, all references to the "Sponsor" will refer only to Grayscale Investments Sponsors, LLC. The trustee of the trust is CSC Delaware Trust Company, the transfer agent and administrator is The Bank of New York Mellon, the prime broker is Coinbase, Inc., and the custodian is Coinbase Custody Trust Company, LLC.

The shares are currently quoted on OTCQX under the ticker symbol "GSOL" and, following the effectiveness of the registration statement, the trust intends to list the shares on NYSE Arca under the symbol "GSOL." The trust intends to issue shares on a continuous basis and is registering an indeterminate number of shares. It is expected that the shares will be sold to the public at varying prices determined by reference to the price of SOL and the trading price of the shares on NYSE Arca at the time of each sale.

The trust issues shares only in one or more blocks of 10,000 shares, known as a "Basket," to certain authorized participants from time to time. Baskets are offered in exchange for SOL. Through its redemption program, the trust will redeem shares from authorized participants on an ongoing basis.

The U.S. dollar value of a Basket of shares at 4:00 p.m., New York time, on the trade date of a creation or redemption order is equal to the "Basket Amount," which is the amount of SOL required to create or redeem a Basket of shares, multiplied by the "Index Price," which is the U.S. dollar value of a SOL derived from the Digital Asset Trading Platforms that are reflected in the CoinDesk Solana Price Index.

The trust is not a registered investment company under the Investment Company Act of 1940 and is therefore not subject to regulation under the Investment Company Act. Furthermore, the sponsor believes that the trust is not a commodity pool for purposes of the Commodity Exchange Act of 1936 and that neither the sponsor nor the trustee is subject to regulation by the Commodity Futures Trading Commission as a commodity pool operator or a commodity trading advisor.

The trust's business, assets, financial condition, results of operations, and prospects may have changed since the dates of the prospectus. Investors are advised to rely on their own examination of the trust, the SOL industry, the operation of the SOL market, and the terms of the offering and the shares, including the merits and risks involved.

Grayscale's filing is among several crypto ETF applications in the United States following a regulatory shift in Washington DC, and Solana is widely expected to be the next digital asset ETF approved by the SEC. The approval of a Solana ETF could mitigate the price decline of SOL by giving traditional financial investors exposure to SOL and funneling capital from the stock market into the altcoin. Fresh investment capital pouring into SOL may prop up prices during general market downturns, making the altcoin more resilient to price shocks than digital assets lacking traditional investment vehicles.