Volatility Shares will begin trading the first-ever Solana futures ETFs tomorrow. The two ETFs, Volatility Shares’ Solana ETF (SOLZ) and Volatility Shares’ 2x Solana ETF (SOLT), will offer both standard and leveraged exposure to futures contracts of the token.
The ETFs come after months of regulatory groundwork and the successful listing of these products on the Depository Trust & Clearing Corporation (DTCC) in late February.
Solana Investors Welcome New Era
Coinbase introduced CFTC-regulated Solana futures contracts earlier this year, laying the groundwork for the two ETFs. The move created the regulated futures market necessary for such products, addressing a key concern that had previously delayed their introduction.
While Solana is the underlying asset, the ETFs will function similarly to ProShares’ Bitcoin Strategy ETF (BITO) and Volatility Shares’ 2x Bitcoin Strategy ETF (BITX).
On one hand, SOLZ will provide 1x exposure to Solana futures contracts, while SOLT will offer 2x leveraged exposure. This combination could potentially deliver twice the daily returns (or losses) of Solana futures.
They will provide exposure through futures contracts, similar to how BITO and BITX operate with Bitcoin, without directly holding the tokens. This approach gives investors exposure to $SOL price swings and enables the funds to operate inside the present regulatory regime.
Moreover, SOLT and other leveraged exchange-traded funds (ETFs) are meant for short-term trading, as the daily rebalancing process may lead to performance deterioration over time. As an example, the 2x Bitcoin ETF’s volatility (35.34%) of BITX, Volatility Shares, has been higher than the non-leveraged BITO’s (17.53%). This suggests that the products may exhibit comparable patterns.
Are Spot Solana ETFs Next?
Analysts at Bloomberg predict a 70% chance of a spot-ETF approval by October 2025. These will allow funds to hold SOL tokens directly rather than futures contracts.
In anticipation, several major asset managers, including Franklin Templeton, Grayscale, Bitwise, VanEck, 21Shares, and Canary Capital, have already filed applications for spot ETFs.
