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- Bitwise CEO has predicted that Solana (SOL) could dominate the staking Exchange Traded Fund (ETF) industry by outshining Ethereum (ETH).
- His reason is that Solana staking has a faster withdrawal wait time compared to Ethereum.
Bitwise CEO Hunter Horsley has boldly declared that Solana could easily outshine Ethereum in the Staking Exchange Traded Fund (ETF) market.
Speaking at Token2049 in Singapore, Horsley argued that Solana has a better edge due to its shorter unstaking period, which significantly reduces redemption risk.
Why Ethereum (ETH) Could Trail Solana (SOL)
Technically, unstaking periods are very crucial in the industry as they show how quickly a staked asset could be converted back to liquid tokens.
Currently, data from Validatorqueue suggests that Ethereum’s staking entry queue is around 188,477 with a waiting time of 3 days. As of the first week of September, this was about 860,369 ETH, the highest in two years.
Ethereum staking exit queue is also reported to be around 1,998,012 ETH. Fascinatingly, the average wait time is around 34 days. Solana, on the other hand, typically clears faster according to Horsley.
It’s a huge problem. The ETFs need to be able to return assets on a very short time frame. So this is a huge challenge.
On the other side, the Bitwise CEO noted that Ethereum could work around this; however, it could be a little costly and may face capacity constraints. In Europe, for instance, Bitwise’s Ethereum staking exchange-traded product (ETP) strategically uses credit facilities to ensure that redemptions are kept liquid.
Not just that, he also mentioned how liquid staking tokens like Lido’s stETH could address this problem by allowing investors to stay liquid while earning rewards.
Earlier, ETF analyst Nate Geraci hinted that multiple Solana ETFs with staking could receive approval in two weeks, as mentioned in our recent coverage.
His prediction followed reports that asset managers, including Franklin Templeton, Fidelity Investments, CoinShares, Bitwise Asset Management, Grayscale Investments, VanEck, and Canary Capital, have amended their S-1 documents with the US Securities and Exchange Commission (SEC).
Amid the backdrop of this, REX-Osprey Solana Staking ETF has already launched on the Cboe BZX Exchange. Data suggests that it made $33 million in trading volume as well as $12 million in inflows on its debut. Speaking on the overall development, 10x Research’s head of research, Markus Thielen, recently hinted that staking for Ethereum ETFs, for instance, could significantly “increase yield and dramatically reshape the market.”
Currently, the industry is expecting the SEC to make decisions on several requests to permit Ethereum ETFs to offer staking. As indicated in our previous news brief, NYSE Arca submitted an application to the SEC in February. As also highlighted in our earlier discussion, Bitwise has proposed the integration of staking into its Ethereum ETF.
In any case, these approvals could have a massive impact on the prices of the underlying assets. At the time of writing, SOL was trading at $225 after surging by 3.9% in the last 24 hours.
