Bitwise CEO Hunter Horsley believes Solana could surpass Ethereum in the staking exchange-traded fund (ETF) sector, citing its design as more advantageous for investors.
In a conversation with Cointelegraph editor Andrew Fenton at Token2049 in Singapore, Horsley emphasized that Solana’s faster unstaking period provides a competitive edge. For example, Ethereum’s withdrawal queue has recently hit record levels, while Solana’s generally clears more swiftly. Horsley mentioned that this distinction is crucial for issuers who need to rapidly return assets to investors.
“It’s a significant challenge,” Horsley remarked. “ETFs need to expedite asset returns within a short time frame. This presents a considerable issue.”
Staking involves committing cryptocurrency to help secure a network in exchange for rewards in the same token. Due to the locked nature of these assets, withdrawals can encounter delays based on network demand fluctuations.
Horsley indicated that Ethereum-based products can navigate this problem. For instance, Bitwise’s Ethereum staking exchange-traded product (ETP) in Europe employs a credit facility to maintain liquidity for redemptions. However, such facilities incur costs and have “capacity constraints,” he noted.
Liquid staking tokens like Lido’s stETH serve as another alternative, representing staked assets and allowing investors to retain liquidity while still earning rewards.
Horsley’s remarks follow a rise in Ethereum’s staking entry queue, which reached 860,369 ETH in early September, the highest level of 2023.
The current ETH staking queue holds 201,984 ETH, with an average wait of around three days. The exit queue is notably longer, approximately 34 days, with over 2 million staked tokens pending withdrawal, as reported by onchain data.
Related: Nasdaq files application to add staking for BlackRock iShares ETH ETF
SOL and ETH ETFs face October deadlines
The US Securities and Exchange Commission is poised to rule on several pending applications for Solana and Ethereum exchange-traded funds in the upcoming weeks, including those featuring staking options.
These include Solana ETFs from Bitwise, Fidelity, Franklin Templeton, CoinShares, Grayscale Investments, Canary Capital, and VanEck—all of which submitted amended S-1 documents to the SEC to revise their existing funds’ staking provisions.
In August, the SEC decided to postpone its approval of Ether staking on two ETFs from Grayscale until the end of October.
Approval for staking on BlackRock’s iShares Ethereum Trust was also deferred to October 30.
As reported by Cointelegraph, 16 crypto-related funds are currently awaiting decisions from the SEC this month. However, the ongoing US government shutdown has left federal agencies operating with reduced staff, likely delaying decisions on crypto ETFs.
Magazine: Quitting Trump’s top crypto job wasn’t easy: Bo Hines
