Solana ETF Rakes in $200 Million in First Week as Western Union Announces Strategic Bet Amid Wall Street Battle
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Solana ETF Rakes in $200 Million in First Week as Western Union Announces Strategic Bet Amid Wall Street Battle
The approval of a Solana ETF is not an endpoint, but the starting gun for a new era.
Navigating Web3 tides with focused insightsAuthor: Cathy, Baihua Blockchain
In late October 2025, the crypto world witnessed a historic moment. Solana (SOL) broke through the final regulatory barriers and became the third cryptocurrency, after Bitcoin and Ethereum, to receive approval for a spot exchange-traded product (ETP) in the United States.
This is not just another boring headline of "yet another ETF approved." Its approval process was dramatic, its product design full of hidden nuances, and the market reaction stunned countless traders. For those of us in the crypto industry, the arrival of the Solana ETF marks not an end, but the beginning of a story filled with "insider" dynamics and new opportunities.
01 Wall Street's "Civil War"
The birth of the Solana ETF was highly unusual. It did not emerge from a public vote or enthusiastic press release by the SEC (U.S. Securities and Exchange Commission), but during a period of U.S. federal government shutdown chaos.
During this unique window when regulatory functions were limited, two asset management giants—Bitwise and Grayscale—demonstrated remarkable legal acumen. They leveraged SEC guidance issued during this time, which allowed S-1 registration statements to become effective automatically without requiring a "delayed amendment."
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October 28: Bitwise Solana Staking ETF (ticker: BSOL) launched first on the New York Stock Exchange (NYSE).
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October 29: Grayscale Solana Trust (ticker: GSOL) followed closely, successfully converting its trust product into an ETP.
This "regulatory raid" opened a compliant investment gateway to Solana for hundreds of billions of dollars in institutional capital and retail retirement accounts in the U.S.
The first-week data was nothing short of "heavyweight":
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First-week net inflows: $199.2 million
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Total assets under management (AUM) quickly surpassed the $500 million mark.
But "averages" conceal the truth. Behind these nearly $200 million in massive inflows was an extremely fierce, winner-takes-all "Wall Street civil war."
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Winner: Bitwise (BSOL), first-week net inflows of $197 million, total AUM (including seed capital): approximately $420 million.
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Loser: Grayscale (GSOL), first-week net inflows: $2.18 million, total AUM (including converted assets): approximately $101 million.
You read that right. In new incoming funds, Bitwise's BSOL captured almost 99% of the market share. This seemingly evenly matched battle was effectively decided on day one.
Why such a lopsided outcome? The answer lies in BSOL’s textbook-perfect "three elements of a lightning strike":
Timing (one day earlier, win it all): BSOL listed on October 28 (Tuesday), while GSOL only completed its conversion on the 29th (Wednesday). In the liquidity-driven ETF world, Bloomberg analysts hit the nail on the head: "Being just one day behind actually makes a huge difference. It makes competition much harder." BSOL successfully positioned itself as the "authentic" Solana ETF.
Pricing (0.20% vs 0.35%): BSOL charges a management fee of only 0.20%, and waives it entirely for the first three months or until AUM reaches $1 billion. In contrast, GSOL charges a hefty 0.35%. For cost-conscious institutional investors, this 0.15% annual difference is impossible to ignore.
Product (100% vs 77%): This was the decisive "secret weapon." BSOL committed in its prospectus to stake 100% of its SOL holdings, whereas GSOL committed to staking only 77% of its assets.
To those outside the crypto space, this 23% difference might seem trivial. But to insiders, this is precisely where the revolutionary nature of the Solana ETF lies.
02 The "Yield-Bearing" ETF
The launch of the Solana ETF is structurally more revolutionary than Bitcoin ETFs.
A Bitcoin ETF is merely a digital gold vault. You hold it, and it generates no returns. But Solana is a proof-of-stake (PoS) asset; holding and staking it is like owning a piece of "digital real estate" that continuously generates rental income.
The Allure of "Yield-Bearing Assets"
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Yield Dominance: Solana’s annual percentage yield (APY) from staking ranges between 5% and 7%. This not only far exceeds Ethereum’s ~2% yield but also provides institutional investors with a "unique income stream."
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Narrative Shift: Bitwise Chief Investment Officer (CIO) Matt Hougan put it bluntly: "Institutional investors like ETFs, and they like income. Solana is the highest-income blockchain. Therefore, institutional investors like the Solana ETF."
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Core Product Nature: Investing in a Bitcoin ETF is a bet on the price appreciation of "digital gold." Investing in a Solana ETF, however, is a dual bet—on price appreciation plus a substantial cash flow (staking rewards) uncorrelated with traditional bonds or stocks.
The biggest "easter egg" lies in the SEC’s stance.
When Ethereum ETFs were approved in 2024, the word "staking" was strictly taboo. The SEC strongly opposed any implication of securities-like attributes tied to staking, forcing all issuers to hastily remove related clauses.
This time, the SEC quietly "gave the green light," tacitly approving the listing of both BSOL and GSOL—products that explicitly include staking.
This tacit approval marks a significant shift in the SEC’s regulatory position. It has opened a brand-new, trillion-dollar lane on Wall Street for "yield-bearing crypto assets." Institutions can now not only buy cryptocurrencies but also use compliant ETF tools to "employ" these assets to work for them (via staking). This fundamentally changes the game.
03 Why Did the Price Crash Despite "Massive Bullish News"?
While Wall Street celebrated this ETF victory, every trader watching the charts was left deeply confused:
If nearly $200 million flowed into the ETF in its first week, why did SOL’s price plummet?
Data shows that after the ETF launch, SOL’s price didn’t rise—it sharply corrected. On October 30, the price dropped 8% in a single day, retreating 27% from its recent August highs and even dipping as low as $163, far below the expected $300.
"Inflows up, price down"—this anomaly caught many off guard. But digging deeper into the data reveals this is not a sign of ETF failure, but the convergence of four powerful forces:
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"Buy the rumor, sell the news": The classic playbook. A large number of short-term traders who had accumulated positions weeks (or even months) before the ETF approval took profits en masse the moment the news hit.
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History Repeats (Bitcoin): This mirrors the price action following the January 2024 Bitcoin ETF launch. Back then, BTC also saw flat or declining prices (~-5%) post-launch despite strong inflows. The real rally only began weeks later, after the "sell the news" selling pressure was fully absorbed.
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Macro "Perfect Storm": The timing of the Solana ETF launch couldn't have been worse. It coincided with a broad risk-off wave across the crypto market. During the same week (starting October 27), Bitcoin ETFs experienced massive outflows of $600 million to $946 million—the entire market was bleeding.
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"Whale" Selling: This was the most devastating blow. On-chain data revealed that trading giant Jump Crypto swapped 1.1 million SOL (worth ~$205 million) for Bitcoin on October 30—the day after BSOL launched.
Now, let’s piece together all the clues:
During a "perfect storm" of profit-taking sentiment and over $600 million in Bitcoin ETF outflows, a whale dumped $205 million worth of SOL into the market.
Under normal conditions, this would be enough to crash SOL’s price.
Yet, in the last week of October 2025, this $205 million selloff was almost perfectly absorbed by the $199.2 million in new institutional buying driven by the Solana ETF—primarily BSOL.
This is the truth: Amid a bleeding broader market, Solana ETF inflows demonstrated astonishing "relative strength." A new cohort of institutional investors (ETF buyers) is directly absorbing sell-offs from established players (like Jump Crypto). This is not bearish—it’s a strong long-term bullish signal. It proves the emergence of a powerful, sustained institutional buying base.
04 Where Is Solana ETF Headed?
With ETF approval secured, Wall Street’s next question is: how much capital can it absorb? On this front, there’s a stark divide between crypto-native firms and traditional financial giants:
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Bullish Camp (Crypto-Native): Grayscale Research Head Zach Pandl predicts Solana ETPs could absorb 5% of Solana’s total supply within one to two years—equivalent to over $5 billion in inflows at current prices.
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Cautious Camp (Traditional Finance): JPMorgan stands out as the outlier. In a report, they forecast only $1.5 billion in net inflows for Solana ETFs in the first year.
Why is JPMorgan so conservative? Their reasoning: "weaker institutional recognition of Solana" and concerns about "meme coin trading increasingly dominating network activity."
JPMorgan’s concerns reflect a common anxiety in traditional finance: Is Solana a high-tech financial infrastructure, or a "meme coin casino" full of speculators?
Yet, just two days after the ETF launch, the arrival of "new money" settled the debate over whether Solana is a "casino or infrastructure."
On October 30, 2025, global payments giant Western Union announced a major strategic move: it selected the Solana blockchain as the issuance network for its new stablecoin—the U.S. Dollar Payment Token (USDPT)—planned for launch in the first half of 2026.
Western Union explicitly cited Solana’s "high performance," "high throughput, low cost, and instant settlement" as the reasons for their choice.
This announcement carried more weight than the ETF itself. It perfectly answered JPMorgan’s doubts. You don’t build a global remittance network on a "meme coin casino." Western Union betting its core future business on Solana is the strongest endorsement of Solana’s "financial infrastructure" credentials.
05 Summary
Solana ETF approval is not an endpoint, but the starting gun for a new era. It clearly reveals two parallel tracks for institutional adoption of Solana:
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Financialization Track (ETF): Wall Street asset managers (like Bitwise) are packaging SOL (the token) into a "yield-generating" financial product for their institutional clients.
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Infrastructure Track (Western Union): Global enterprises (like Western Union) are using Solana (the network) as a "low-cost" financial infrastructure to build their core services.
These two tracks reinforce each other. Western Union’s adoption provides the strongest fundamental support for institutions buying the ETF. Meanwhile, the massive AUM and professional staking brought by ETFs (Bitwise’s "New Wall Street" narrative) create a safer, more stable network for builders like Western Union.
While JPMorgan worries about "meme coins," Bitwise and Western Union have already acted: Solana is not just the "New Wall Street"—it is becoming the "new infrastructure" for Wall Street and global payments alike. The flywheels of financialization and infrastructure development have begun accelerating in tandem.
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