Bitwise’s Low Solana ETF Fees Surprise Industry Analyst

Bitwise, the asset manager, has established a 0.20% fee on its revised Solana ETF application based in the US, which now features staking. This move may indicate a competitive landscape among ETF issuers, according to ETF analyst Eric Balchunas.

“We thought we’d see higher fees first; it would take competition to drive this low,” Balchunas stated in a post on X on Wednesday. “They likely assumed it would end up there anyway, so why not do it now?” he added, referring to the strategy as a “veteran Terrordome move right there.”

On Wednesday, Bitwise updated its filing with the US Securities and Exchange Commission to reflect the new annual management fee of 0.20% for its proposed Solana (SOL) ETF, now incorporating a staking feature. This fee positions it in the middle range of most crypto ETFs, which typically charge between 0.15% and 0.25%.

“Lower fees have a strong track record for attracting investors, suggesting positive inflow potential,” Balchunas elaborated.

Speculation on crypto ETF fees has been prominent

As potential crypto ETFs loom, significant focus has been on which issuers may present the lowest fees.

Competition intensified prior to the January 2024 US launch of spot Bitcoin (BTC) ETFs, where asset manager VanEck eliminated all fees and later extended the waiver until January 2026 for up to $2.5 billion in assets. In contrast, Grayscale Bitcoin Mini Trust (BTC) set a 0.15% annual sponsor fee.

On July 2, the US’s first Solana staking ETF, the REX-Osprey Solana Staking ETF (SSK), concluded its initial trading day with $12 million in inflows. Its annual management fee stands at 0.75%.

BlackRock’s quiet stance on Solana ETF

However, Balchunas noted that Bitwise’s offering is cheaper, offers better tracking, and is completely backed by Solana’s actual assets. “SSK has numerous tracking issues, similar to a futures ETF, trailing spot Solana by 12% — though it has improved over the past month,” he remarked.

Related: US Bitcoin ETFs register 2nd-highest inflows since their launch during the crypto rally

Crypto commentator “Magoo PhD” raised a question frequently asked regarding why BlackRock, the largest asset manager globally, “has not submitted a SOL ETF application.”