Bitwise ‘not playing’ as it proposes low fee for its Solana ETF

Asset manager Bitwise’s decision to set a 0.20% fee on its amended US-based Solana ETF application, which now includes staking, may be a sign of how competitive the product could get among ETF issuers, according to ETF analyst Eric Balchunas.

“Thought we’d see higher first, need war to get this low,” Balchunas said in an X post on Wednesday. “They prob figured it’s gonna end up there anyway, so just do it now,” he said, adding it is a “veteran Terrordome move right there.”

Bitwise amended its filing with the US Securities and Exchange Commission on Wednesday, updating the proposed Solana (SOL) ETF to include an annual management fee of 0.20% and the addition of a staking feature. The fee places it in the middle of the range for most crypto ETFs, which typically fall between 0.15% and 0.25%.

“Low fees have a near-perfect record of attracting investors, so it’s a good sign for inflow potential,” Balchunas explained.

Crypto ETF fee speculation has been around for some time

Ahead of potential crypto ETF launches, industry attention has often focused on which ETF issuers would offer the lowest fees. 

The competition was especially fierce before the US debut of spot Bitcoin (BTC) ETFs in January 2024, when asset manager VanEck waived all fees and later extended the waiver through January 2026 for up to $2.5 billion in assets under management. Meanwhile, Grayscale Bitcoin Mini Trust (BTC) set an annual sponsor fee of 0.15%.

On July 2, the US’s first Solana staking ETF, the REX-Osprey Solana Staking ETF (SSK), ended its debut trading day with $12 million in inflows. The annual management fee for the SSK is 0.75%.

BlackRock’s silence on Solana ETF 

However, Balchunas pointed out that Bitwise’s proposed offering is cheaper, has better tracking, and is 100% physically backed by Solana’s spot assets. “SSK is riddled with tracking issues like a futures ETF. It trails spot Solana by 12% — although it got better in the past month,” he said.

Related: US Bitcoin ETFs post 2nd-highest inflows since launch on crypto rally

Crypto commentator “Magoo PhD” echoed a statement that has been asked by many in recent times over why the world’s largest asset manager, BlackRock, “is not filing for a SOL ETF.”