3iQ Proposes Canada's First Solana ETF

3iQ Proposes Canada's First Solana ETF

Canadian investment fund manager 3iQ has announced a proposal for The Solana Fund (QSOL), which is set to be North America's first Solana-based Exchange-Traded Fund (ETF), pending approval in Canada.

In their announcement, 3iQ revealed that QSOL will be listed on the Toronto Stock Exchange (TSX) through an initial coin offering (IPO). This innovative investment product aims to provide exposure to the cryptocurrency Solana (SOL), mirroring the daily price movements of SOL in US dollars. The proposal for QSOL has been submitted to securities regulators across Canada, with the exception of Quebec.

Additionally, QSOL will offer staking services, allowing investors to earn passive income with anticipated yields between 6% and 8%. Coinbase Custody and Tetra Trust will act as custodians for the ETF, while Coinbase Custody will also provide institutional staking infrastructure. Greg Benhaim, Executive Vice President of Product and Head of Trading at 3iQ, stated, "As pioneers in digital asset investment management, we are committed to continuing our mission of providing regulated investment vehicles for both individual and institutional investors to access the crypto asset class efficiently."

Canada's Leadership in Crypto ETFs

Bloomberg ETF analyst James Seyffart highlighted that Canada was the first country to approve the launch of spot Bitcoin and spot Ether ETFs. Previously, 3iQ introduced The Bitcoin Fund (QBTC) and The Ether Fund (QETH), marking the first publicly traded spot crypto investment products in Canada. The firm also launched the 3iQ Ether Staking ETF (ETHQ), the first North American ETP employing an Ether staking strategy.

While the concept of a Solana investment product is not entirely new globally, Seyffart noted the significant demand, stating, "You'd be surprised to learn that we already have over $1 billion in Solana ETPs elsewhere in the world," in a post on X (formerly Twitter) on June 21, 2024.
Looking forward, Standard Chartered predicts that Solana and XRP ETFs might launch in 2025, following the U.S. SEC's approval of Bitcoin spot and Ether ETFs. Geoffrey Kendrick, an analyst at Standard Chartered, explained that the underlying technology of Solana is quite similar to Ethereum (ETH), suggesting that the SEC might find it challenging to categorize Solana as a security, given Ethereum's regulatory status. Kendrick believes that the approval of Solana and XRP ETFs could pave the way for other altcoin ETFs, particularly as the U.S. government appears to be increasingly open to the cryptocurrency industry.

Conclusion

3iQ's proposal for The Solana Fund (QSOL) marks a significant milestone in the evolution of cryptocurrency investment options in North America. As the first Solana-based ETF in Canada, QSOL aims to offer investors regulated and accessible exposure to Solana's market movements, while also providing opportunities for passive income through staking. This initiative not only reinforces 3iQ's leadership in the digital asset space but also aligns with Canada's pioneering stance in the realm of cryptocurrency ETFs, having previously introduced spot Bitcoin and Ether ETFs. By leveraging custodial and staking services from Coinbase Custody and Tetra Trust, QSOL is positioned to cater to both retail and institutional investors looking for diversified crypto investment opportunities.

The potential approval and subsequent success of QSOL could signal broader acceptance and integration of altcoin ETFs into the financial markets. As noted by industry experts, the burgeoning interest in Solana ETPs worldwide and the possibility of future launches for Solana and XRP ETFs in the U.S. underscore a growing appetite for diversified crypto investment products. This trend suggests a gradual but steady shift towards mainstream adoption of a wider range of cryptocurrencies within regulated investment frameworks. Looking ahead, the launch of QSOL and similar products could pave the way for more innovative and inclusive financial instruments in the rapidly evolving crypto landscape.

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