Industry executives revealed that Bitwise Asset Management successfully launched the first U.S. Solana spot ETF during the Securities and Exchange Commission (SEC) shutdown, breaking traditional regulatory norms and forcing competitors to reassess their product strategies.

On October 28, Bitwise introduced the "Solana Staking ETF," which tracks the spot price of Solana, the sixth-largest cryptocurrency by market cap. The process used was unproven and did not require formal SEC approval. Six industry sources disclosed that analysts view single-crypto ETFs as the next "mega-market," and Bitwise's move secured a first-mover advantage, frustrating competitors who took a more cautious approach and are now scrambling to catch up.

According to LSEG data, the product attracted $420 million in inflows within its first week. JPMorgan predicts that such "altcoin ETFs" could draw $14 billion within six months of launch, with $6 billion potentially flowing into Solana-related products.

Matt Hougan, Bitwise’s Chief Investment Officer, stated, "Bitwise does like being first." He added, "We’ve always followed the rules." The U.S. government remains in shutdown, and the SEC declined to comment.

**"Risk and Opportunity Go Hand in Hand"** Sources said Bitwise’s move disrupted plans of other issuers waiting to launch altcoin ETFs.

The next day, Grayscale Investments converted its existing private fund into an ETF using the same method. Public filings show VanEck, Fidelity, and Invesco adjusted registration statements to mirror Bitwise’s approach, while also submitting applications for Ripple’s XRP-related ETFs. Meanwhile, other issuers are reportedly evaluating whether to take similar risks.

Analysts noted that competition is fierce for less differentiated products, where being first can capture investor attention. They cited ProShares’ Bitcoin ETF as an example—approved just days ahead of rivals in 2021, it now holds $2.8 billion in assets, while its closest competitor manages only $400 million.

Ben Slavin, BNY Mellon’s Global Head of ETFs, remarked, "For any firm that can seize first-mover advantage, there’s both risk and opportunity. Even a one-day lead can determine who earns millions in fees."

**Shutdown Complications** In mid-September, the SEC allowed exchanges to adopt a standardized listing process for crypto ETFs, shortening lengthy reviews and enabling dozens of "ready-to-launch" ETFs to proceed without formal approval. However, sources said many issuers still prefer the SEC’s traditional "blessing" and hesitated to test the new process amid the looming government shutdown.

A day before the October 1 shutdown, the SEC clarified that issuers could launch products during the hiatus if filings warned investors of automatic effectiveness after 20 days. Yet ETF issuers and lawyers noted the SEC also cautioned about risks, including potential suspension or withdrawal if issues arise.

The final decision fell to issuers and exchanges. Four anonymous sources said Cboe Global Markets advised waiting for SEC approval, while NYSE was willing to proceed. On October 23, Bitwise shifted its ETF listing from Cboe to NYSE, launching five days later. A Bitwise spokesperson called the move "significant for such a unique product."

The same day, Canary Capital debuted the first litecoin and Hedera spot ETFs on Nasdaq—smaller altcoins—via the same process.

Thomas Erdosi of CF Benchmarks noted, "A highly unusual series of events led some issuers to believe they could move forward."

NYSE declined to comment, and Cboe did not respond. Grayscale’s Chief Legal Officer Craig Salm said its ETF conversion followed "substantially complete" SEC communication.

This staggered altcoin ETF rollout contrasts with the SEC’s past "batch approvals" for Bitcoin and Ethereum ETFs. Some issuers privately criticized Solana ETF approvals as "unfair and chaotic," while others acknowledged Bitwise simply "played by the rules."

One issuer remarked, "If you don’t act, you lose the chance to win."