This week is poised to become the most critical week in the cryptocurrency ETF space since the launch of the Ethereum ETF in July 2024 — something almost no one anticipated.
On October 29th, three brand-new cryptocurrency ETFs made a high-profile debut on Wall Street: Bitwise's $BSOL Solana ETF recorded a trading volume of $56 million on NYSE Arca, becoming the largest ETF launch this year; Canary Capital's Hedera ETF and Litecoin ETF debuted on Nasdaq with trading volumes of $8 million and $1 million, respectively.
Later this morning, Grayscale will list its Grayscale Solana Trust ($GSOL) on NYSE Arca, commencing trading as an ETF. Why did these ETFs suddenly launch during a government shutdown? It turns out that legal processes don't always require government agencies to be fully operational.
Earlier this month, the ETF issuers added a special "immediate effectiveness" clause to their amended S-1 registration statements: if the exchange agrees, the filing automatically becomes effective 20 days after submission. This default legal mechanism, established under the Securities Act of 1933, does not require SEC approval. Previously, SEC staff would review S-1 filings and then manually declare them effective before the ETFs could begin trading.
Bitwise was the first to update its S-1 filing, thereby gaining a clear first-mover advantage. Historically, the SEC ensured that all cryptocurrency ETFs, including the 10 Bitcoin ETFs launched in January 2024, started trading on the same day.
SEC Chairman Paul Atkins posted on platform X, stating that he was pleased to see companies utilizing the 20-day statutory waiting period to bring products to market during the government shutdown and expressed appreciation for this legal mechanism used by Bitwise and Canary Capital to launch their ETFs.
The significance of this event lies in the emergence of a new paradigm for ETF issuance, where the SEC's role has been diminished compared to the past. It is expected that other issuers will leverage this mechanism to bring products to market more quickly, especially while the government remains in a shutdown state.
