The "Shanzhai Coin" ETF craze is here! U.S. Solana, Litecoin, and Hedera ETFs will begin trading this week, while the Hong Kong Solana ETF has already been listed.

The cryptocurrency ETF market is experiencing a wave of expansion. Following the successful launches of Bitcoin and Ethereum spot ETFs, several "altcoin" ETFs will begin trading in the U.S. market this week, while the Hong Kong market has taken the lead by listing a Solana ETF. On October 28, reports indicate that four ETFs tracking Solana, Litecoin, and Hedera will be listed this week on Nasdaq and the New York Stock Exchange. According to Bloomberg ETF analyst Eric Balchunas, Bitwise Solana Staking ETF and Canary Litecoin ETF, Canary HBAR ETF will begin trading on Tuesday, and Grayscale Solana ETF will be listed on Wednesday. These products bypassed the normal approval process by using exchange-certified 8-A filings and comply with the general commodity trust listing standards adopted by the SEC in September of this year. Notably, the Hong Kong market has already taken the lead. According to the official website of China Asset Management (Hong Kong), the Solana spot ETF issued by China Asset Management (Hong Kong) was listed on the Hong Kong Stock Exchange on October 27, becoming Asia’s first product of its kind, as well as Hong Kong’s third approved cryptocurrency spot ETF after Bitcoin and Ethereum. Market enthusiasm for "altcoin" ETFs is heating up. According to previous Wallstreetcn articles, Bloomberg compiled data showing that about 130 ETFs related to small cryptocurrencies are pending approval at the U.S. Securities and Exchange Commission, covering tokens such as Polkadot, Chainlink, and meme coin Pengu. This wave of applications is benefiting from the increasingly relaxed regulatory environment in the U.S., with issuers hoping to replicate the success seen with Bitcoin and Ethereum ETFs. Skipping the standard approval process to accelerate listings The rapid listing of the four "altcoin" ETFs has surprised market observers. These products became listed using exchange-certified 8-A files, providing issuers an alternative path to recent ETF approval processes. Issuers submit these forms to the SEC to register specific securities under the Securities Exchange Act of 1934. Canary indicated that these funds comply with the general commodity trust listing standards adopted by the SEC in September. The listing of these ETFs ends months of speculation on when trading would commence. The U.S. government shutdown has complicated the situation. In an emergency operational plan released October 1, the SEC stated it would "not review and approve" product applications, nor provide other "non-urgent assistance" to registrants. Bloomberg analysts previously predicted the SEC would approve Solana and other altcoin ETFs in early October, setting the probability of approval for SOL products at 100%, with other funds’ probabilities also approaching that level. Canary CEO Steven McClurg said in a statement that the launch of Litecoin is "another milestone moment in a pivotal year for the crypto industry." He said: “Litecoin has demonstrated a proven record of security and reliability, with important enterprise-level applications. We’re proud to provide investors with SEC-registered tools to gain exposure to this vital digital asset.” Solana, Litecoin, and Hedera are the world’s 6th, 29th, and 30th largest digital assets respectively. Solana’s market value exceeds $111 billion, with its recent trading price above $199, rising 0.5% in the past 24 hours. Litecoin and Hedera have recently risen by 3.6% and 1.9% respectively. Hong Kong takes the lead in Solana products Hong Kong has taken the lead in the "altcoin" ETF sector. The Solana spot ETF launched by China Asset Management (Hong Kong) was listed on October 27, making it Asia’s first product of its kind. Previously, Brazil became the first country to launch a Solana spot ETF in 2024, and Canada also approved a Solana spot ETF in April of this year. The ETF’s virtual asset trading platform is operated by OSL Exchange, and OSL Digital Securities serves as the sub-custodian. China Asset Management (Hong Kong)’s management fee is 0.99%, while custody and administrative fees are capped at 1% of the sub-fund’s net asset value. The public blockchain is known for high throughput and low transaction fees and has made notable progress in decentralized finance, NFTs, and Web3 applications since its launch in 2020. However, SOL’s price performance this year has been lackluster, with the latest price at $187.75, down about 36% from this year’s high of $295.6. According to China Times, Dan Zhai, general manager of Spark Private Equity Fund Management Co., Ltd., stated: "The listing of the SOL ETF will provide institutional investors with a compliant and convenient channel to participate in the cryptocurrency market, while lowering the participation threshold for retail investors and boosting market liquidity." 130 "altcoin" ETFs queue for approval According to a Wallstreetcn article, Wall Street is accelerating its push into "altcoin" ETFs. Bloomberg’s data shows that about 130 small cryptocurrency-related ETF applications are pending with the SEC, covering tokens like Cardano, Avalanche, Dogecoin, and many more. Many applications were submitted months ago when market sentiment was optimistic. In a looser regulatory environment, issuers have become bolder, and some applications even include double-leverage tools linked to Trump and Melania-related cryptocurrencies. Jane Edmondson, Head of Index Product Strategy at TMX VettaFi, said: "While it’s hard to predict the winners among altcoins, issuers are taking advantage of a more favorable regulatory environment for crypto products to gain first-mover advantage." However, she remains cautious about whether this application wave matches the level of investor interest. James Seyffart, ETF analyst at Bloomberg Industry Research, described this phenomenon as the ETF industry’s “pasta cannon” strategy: “They’ll fire off a massive number of these products and see what sticks to the wall. Most will likely hit the wall and fail, but ultimately, the market and investors will decide which products can deliver value.” Market volatility tests product value "Altcoin" ETFs face the challenge of highly volatile underlying assets. China Asset Management (Hong Kong) pointed out in its risk warning that SOL, as a digital asset, has a limited history and its price volatility has always been very high. For example, SOL’s price fell by about 96% from November 7, 2021, to January 1, 2023. Compared with traditional securities investment, investments linked to SOL may be extremely unstable. Ilan Solot, Senior Global Market Strategist at Marex Solutions, believes wrapping altcoins into ETFs faces major hurdles—from shallow liquidity and token dilution to small market capitalization. “There are thousands of ETFs that launch and then never gain traction. I suspect only a few of these products will attract meaningful inflows.” Risk Warning and Disclaimer The market has risks, and investment requires caution. This article does not constitute individual investment advice and has not considered the special investment objectives, financial situations or needs of any particular user. Users should consider whether any opinions, views or conclusions in this article are suitable for their specific circumstances. All investments made based on this article are at their own risk.