Written by: Pzai, Foresight News
Crypto compliance is in full swing, and ETF/ETP as an important asset investment carrier has attracted widespread attention from market investors. On December 17, crypto asset management company Bitwise launched the Solana staking ETP in Europe, with the stock code BSOL. It is worth mentioning that the ETP issued this time cooperates with Marinade, a Solana staking service agency, and provides users with an annualized rate of return of 6.48%, which is eye-catching among a number of ETPs. Before Trump took office, in the midst of the crypto compliance progress in other regions outside the United States, Europe took the lead in launching the (Markets in Crypto Assets Regulation Act) (MiCA), which made a clear distinction between the issuance and custody of crypto assets. Because of this, Europe has become one of the few regions that supports the connection between compliant products and on-chain economic benefits.
Preemptive strike
Prior to launching the ETP, Bitwise registered the Solana-related statutory trust in Delaware, USA in November this year, hoping to provide U.S. investors with potential Solana ETF services in the future. With the approval of spot ETFs for Bitcoin and Ethereum this year, Solana's ETF expectations are also rising. However, for U.S. investors, constrained by existing securities laws and the SEC's compliance progress in qualifying Solana securities, there is still no definite date for the issuance of Solana ETFs in the United States, and investors cannot access staking income in these products. In the U.S. ETF listing forecast, Bloomberg analyst Eric Balchunas puts Solana and XRP, tokens that are the focus of the SEC, at the last priority of ETF decisions. Under this premise, major crypto custodians are turning to the European market and providing investors with excess returns through on-chain staking services, while giving investors greater freedom.
Before Bitwise, VanEck and 21Shares had already taken the lead, and 21Shares has obtained a total scale of more than US$1.2 billion in Solana ETP, reflecting investors' favor for Solana. The investment in staking products also reflects investors' confidence in network activities. In the past year, Solana has performed well enough in on-chain activities, and its network staking annualized yield has soared to more than 7.5%, which is higher than many types of ETF products.
The annualized yield of SOL on-chain staking in the past year (Source: stakingrewards.com)
Compliance in Europe
At a time when the crypto sector is booming, in order to cope with the rapid development of the market and the challenges it brings, Europe took the lead in taking action and introduced the (Markets in Crypto-Assets Regulation Act) (MiCA). The Act officially became law in 2023 and will end the transition period on June 30, 2026. MiCA aims to build a unified regulatory framework for the crypto asset market, clarifying important aspects such as the scope of application of the Act, the classification of crypto assets, the regulatory body and the corresponding information reporting system. This makes the EU the first jurisdiction in the world to adopt comprehensive crypto regulations, which is of great significance for companies interested in entering the EU crypto market. For ETF service providers, while providing services in Europe, the improvement of their compliance environment can also form a regional migration effect. By landing ETF-related products in Europe, it will serve as a model for crypto compliance matters after the new government takes office and Paul Atkins takes charge of the SEC. The market expects that custodians will use the pledged ETP infrastructure they use in Europe to provide the same products in the United States.
Globally, especially in Europe, the number and size of assets under management of cryptocurrency ETPs are growing rapidly. As of today, there are 222 cryptocurrency ETPs in the European market, with AUM of $20 billion, an increase of nearly 60% in the past month. These products provide retail and institutional investors with a convenient, regulated and low-cost way to access a range of underlying investments, including but not limited to Bitcoin, Ethereum and other mainstream cryptocurrencies. In addition, as more traditional financial institutions (such as BlackRock) join the ranks of cryptocurrency-native companies, ETPs not only expand investors' access to cryptocurrency investments, but also promote the overall acceptance of cryptocurrencies in global financial markets.
With the implementation of a compliant environment in Europe, it is expected that more compliant product models will be implemented first in Europe (such as RWA, compliant custody, and stablecoin payments). This not only reflects the EU's open attitude towards emerging financial technologies and the effectiveness of its regulatory framework as a test field and incubator for crypto compliance, but also provides valuable experience for other global markets.