As Canada takes a significant step forward in expanding crypto investment options by approving the country’s first spot Solana ETFs with staking features, the United States continues to take a more cautious route. The US Securities and Exchange Commission (SEC) announced a delay in its decision on whether to permit staking in two of Grayscale’s Ethereum ETFs, pushing the timeline to June 1.
Canada to Launch First Spot Solana ETFs on April 16, Setting Stage for Altcoin Fund Expansion
Spot Solana (SOL) exchange-traded funds (ETFs) are officially set to launch in Canada on April 16. Bloomberg senior ETF analyst Eric Balchunas broke the news in an April 14 post on X, revealing that the Ontario Securities Commission (OSC) has given the green light to asset managers Purpose Investments, Evolve ETFs, CI Global Asset Management, and 3iQ to list funds directly holding Solana.
The development comes amid intensifying global interest in cryptocurrency-based financial products, particularly as regulators begin to recognize digital assets beyond Bitcoin and Ethereum. While US regulators remain hesitant to approve similar products tied to altcoins, Canada is once again leading the charge in North America’s crypto ETF race.
Canada has no centralized securities authority, with each province or territory applying its own regulatory framework. However, Ontario’s OSC—one of the most influential provincial regulators—has emerged as a trendsetter in digital asset oversight.
According to TD Bank’s private client note cited by Balchunas, the OSC granted approval to the four firms to proceed with the launch of spot Solana ETFs on the Toronto Stock Exchange (TSX) or other recognized Canadian exchanges.
These new ETFs are not only backed by direct SOL holdings but will also include staking mechanisms, allowing fund managers to earn yield on a portion of the SOL holdings. Balchunas described the inclusion of staking as "our first look at the alt coin race" in ETF structures, signaling a possible diversification of yield-generating strategies in regulated markets.
The OSC recently said that the new ETFs are consistent with regulatory amendments outlined in a January notice regarding cryptocurrency holdings in publicly traded funds. The changes reflect a broader recognition of crypto assets as investable financial instruments—provided that they meet investor protection standards.
US Still Cautious Amid Altcoin ETF Push
While the OSC’s move will likely stir interest from both retail and institutional investors, it also throws into stark relief the US Securities and Exchange Commission’s (SEC) sluggishness in approving altcoin-based ETFs.
To date, the SEC has only approved spot Bitcoin and Ether ETFs, while applications for products tied to Solana, XRP, and other alternative cryptocurrencies remain under review.
Staking remains another regulatory stumbling block in the United States. Currently, US-based crypto ETFs are prohibited from staking their assets. Bloomberg ETF analyst James Seyffart recently noted that staking for Ether ETFs could be approved as early as May, though procedural delays may extend that timeline. If approved, it could open the door for future staking-based ETFs in the US, but regulatory hurdles remain significant.
The Canadian spot Solana ETFs may be launching into a skeptical North American market. In March, asset manager Volatility Shares debuted the first Solana futures ETFs in the US, but the response has been tepid. As of April 14, the firm’s SOLZ ETF has accumulated just around $5 million in net assets, according to its website.
Volatility Shares’ SOL futures ETF has roughly $5 million in net assets (Source: Volatility Shares)
Balchunas noted that the two US-listed Solana futures ETFs have underperformed in terms of assets under management (AUM), even when compared to recently launched leveraged XRP ETFs.
“FWIW, the 2 Solana ETFs in US (which track futures so not a perfect guinea pig) haven’t done much,” he wrote on X. “Very little in AUM… Wouldn’t read a ton into it [as a predictor] for spot SOL ETFs.”
His caution highlights a crucial point: while regulatory approvals are necessary, investor appetite is equally important. Katalin Tischhauser, research head at crypto bank Sygnum, echoed this sentiment in an August interview.
“There is all this frothy excitement in the market about these ETFs coming, and no one can point to where substantial demand is going to come from,” she warned.
Solana’s Market Standing and the Road Ahead
Solana, currently trading at around $130, has established itself as one of the leading altcoin networks due to its high throughput, low transaction costs, and growing developer ecosystem. Its appeal among institutional and retail investors alike could make it a strong candidate for mainstream financial products—especially if these ETFs prove successful in Canada.
If Purpose, Evolve, CI, and 3iQ see significant inflows following the April 16 launch, it could prompt other jurisdictions to accelerate approval processes for altcoin-based ETFs. The launch may also rekindle investor conversations around diversifying beyond Bitcoin and Ethereum, especially in light of growing interest in blockchain technologies beyond simple digital currency use cases.
SEC Delays Decision on Ether Staking for Grayscale ETFs Until June 1, Extending Uncertainty for Investors
In related news, the United States Securities and Exchange Commission (SEC) has officially delayed a decision on whether to allow Ether (ETH) staking in two of Grayscale’s Ethereum-focused ETFs, extending the timeline of regulatory uncertainty for investors and asset managers alike.
According to an April 14 announcement, the SEC now plans to make its next move on or before June 1, with a final deadline set for the end of October.
The delay impacts Grayscale’s proposed rule change for the Grayscale Ethereum Trust ETF and the Grayscale Ethereum Mini Trust ETF. If approved, these vehicles would become the first publicly traded Ether ETFs in the US permitted to stake investor assets, potentially unlocking yield opportunities for fund holders and raising the appeal of Ether-based investment products in an increasingly competitive ETF market.
At the heart of the matter is whether Ether ETF issuers can participate in staking — a process native to Ethereum’s proof-of-stake consensus mechanism where holders lock up their ETH to validate network transactions and secure the blockchain. In exchange, participants earn yield rewards, making staking an attractive option for passive income seekers and long-term holders.
The SEC’s hesitation is not surprising. While staking is integral to Ethereum’s network economics, the practice raises complex questions about custody, delegation, risk disclosures, and how yield distributions are classified under US securities laws.
Yet, for investors, the potential rewards are clear: according to data from Coinbase, staking ETH currently yields approximately 2.4% annually, while Kraken’s staking services report ranges from 2% to 7%.
Grayscale’s Feb. 14 proposal, filed on behalf of the asset manager by the New York Stock Exchange (NYSE), aims to incorporate these benefits into the ETF structure. However, with the SEC’s decision now delayed for at least another six weeks, the wait continues for both retail and institutional investors hoping to capitalize on ETH’s staking capabilities through regulated products.
Competing Filings and a Crowded Race
Grayscale isn’t the only asset manager vying for a green light from regulators. Industry titan BlackRock, in partnership with 21Shares, is also pursuing the ability to stake ETH held within its iShares Ethereum Trust. That application remains pending, though the firm has made significant progress elsewhere in the Ethereum ETF space.
Indeed, the SEC has shown some willingness to engage with the evolving demands of crypto ETFs. On April 9, the Commission approved options trading for multiple spot Ether ETFs, including products from BlackRock, Bitwise, and Grayscale. This move allows investors to utilize derivatives contracts—such as calls and puts—on Ether ETFs, enhancing the sophistication and flexibility of these vehicles for institutional strategies.
While the approval of options trading is a meaningful step forward, it’s not a substitute for staking. The ability to generate yield via on-chain mechanisms is seen by many as essential to the long-term viability of Ethereum ETFs, especially given the underwhelming investor response compared to Bitcoin-based funds.
Comparing Ethereum and Bitcoin ETF Traction
Since their launch in 2024, Ether ETFs have attracted a cumulative net inflow of $2.28 billion, according to blockchain analytics firm Sosovalue. While a respectable figure, it pales in comparison to the success of Bitcoin ETFs, which have pulled in more than $35.4 billion.
Part of the disparity stems from market dynamics. Bitcoin remains the dominant narrative in crypto among institutional investors, widely perceived as a hedge against inflation and a digital store of value. Ether, despite its robust ecosystem, is often seen as more complex due to its broader utility in smart contracts and decentralized applications. That complexity is only heightened when staking is added to the mix.
Market performance hasn’t helped Ethereum’s case. As of April 15, Ether is trading below $2,000—well beneath its all-time high of $4,866 set in November 2021 and still lagging behind its 52-week high of $4,112. Other altcoins like XRP and Solana have outpaced ETH during this bull market, adding further pressure on Ethereum-based products to innovate or risk being overshadowed.
The SEC’s ongoing reluctance to approve staking features in ETFs highlights broader regulatory tensions in the US crypto landscape. While other jurisdictions—such as Switzerland and Canada—have permitted more flexible fund structures, US regulators continue to proceed with caution. That conservative approach may offer investor protections, but it also risks ceding innovation and capital to more forward-thinking regions.
If the SEC eventually approves staking within Ether ETFs, the move could set a powerful precedent. Not only would it enable passive income generation through regulated vehicles, but it would also signal a broader shift in how US regulators view the integration of blockchain-native features into traditional financial products.
Until then, the market remains in limbo. For now, staking in Ether ETFs is a promise still waiting to be fulfilled.
