Spot Solana ETF launches in Hong Kong! JPMorgan predicts $1.5 billion in fundraising in the first year.

Hong Kong has approved the first Spot Solana ETF, launched by Huaxia Fund, which will begin trading in Hong Kong dollars, US dollars, and Renminbi on the Hong Kong exchange starting October 27. It holds physical Solana backed by the CME CF Solana-USD index, with a total expense ratio close to 2%. JPMorgan expects that the ETF will attract between 1 billion and 1.5 billion USD in its first year.

Hong Kong's first Spot Solana ETF leads the US breakthrough

(Source: SCMP)

Hong Kong has approved the first Spot Solana ETF, making it a leader once again in the regulated digital asset access space in Asia. The product is launched by the Hong Kong branch of China Asset Management Co., Ltd. (ChinaAMC) and will begin trading on October 27 at the Hong Kong exchange in HKD, USD, and CNY. The product will hold physical Solana backed by the CME CF Solana-USD index, with a total expense ratio of nearly 2%.

Institutional investors will be able to purchase direct exposure to Solana through a regulated wrapper for the first time, without the need to manage wallets or private keys, a threshold that has historically limited participation outside the crypto-native space. This regulated investment channel is extremely valuable for institutions as it addresses complex issues such as custody, compliance, auditing, and tax treatment. For traditional institutional investors like pension funds, insurance companies, and sovereign wealth funds, directly holding cryptocurrencies faces internal policy and regulatory restrictions, but purchasing an ETF is a familiar and compliant operation for them.

This Spot Solana ETF is not only headline news for regulatory progress but also an experiment on whether altcoins can support real institutional capital flows. Solana has become the sixth-largest blockchain by market capitalization, but its foundation is still primarily based on cryptocurrency. With this ETF, Solana will join Bitcoin and Ethereum in Hong Kong's lineup of Spot products, giving Hong Kong a first-mover advantage over the United States. In the U.S., only BTC and ETH Spot ETFs have been approved. If capital inflows become a reality, Hong Kong could become the price discovery platform for SOL, just as the Chicago Mercantile Exchange shaped Bitcoin futures.

The Three Breakthrough Significances of the Hong Kong Spot Solana ETF:

World's First: The world's first regulated Solana Spot ETF, leading Hong Kong ahead of the United States and Europe.

Institutional Access: Traditional financial institutions gain compliant investment channels for Solana for the first time.

Price Discovery: Hong Kong could become an institutional-grade price discovery center for SOL, influencing the global market.

Expected capital inflow of 1 to 1.5 billion USD and market impact

The forecast is cautious yet constructive. JPMorgan expects that the first-year inflow for Hong Kong's newly launched altcoin ETF will be between 1 billion and 1.5 billion USD. Compared to the 140 billion USD spot Bitcoin ETF in the United States, this may not seem much, but it still represents a structural growth in institutional demand for Solana. Even a few hundred million USD in issuance can strip Solana's circulating supply from the exchange; this effect has already been seen after the launch of Bitcoin and Ethereum ETFs.

What does an inflow of 1 to 1.5 billion USD mean for the Solana market? Based on the current price of 183 USD, Solana's total market capitalization is approximately 95 billion USD (assuming a circulating supply of about 520 million coins). One billion USD accounts for about 1% of the market cap, while 1.5 billion USD accounts for about 1.6%. This ratio seems small, but considering that this capital is structural and represents long-term institutional allocation, its impact far exceeds that of short-term speculative funds.

The experience of Bitcoin ETFs provides a reference. After the launch of the US Spot Bitcoin ETF, BlackRock's IBIT attracted over $88 billion in less than a year. This influx of funds not only drove the price of Bitcoin from $45,000 to $110,000, but more importantly, it changed the market structure of Bitcoin. A large amount of Bitcoin flowed from exchanges into the ETF custody, reducing the available supply in the market and creating structural support for the price increase.

The Spot Solana ETF may produce a similar effect. ETF market makers will procure physical SOL to create a basket of assets, pulling liquidity from the exchange into custodial accounts. If the first-year inflow reaches 1 to 1.5 billion USD, it would amount to about 5.5 to 8.2 million SOL (based on a price of 183 USD), accounting for approximately 1% to 1.6% of the circulating supply. These tokens will be locked in the ETF custody and will not circulate in the market, thereby reducing supply and driving up prices.

The critical observation window will begin on Monday. Early trading volume will reveal whether investor interest surpasses that of seed investors. If the creation volume in the primary market exceeds USD 50 million to 100 million in the first week, it indicates strong tracking by institutional investors rather than speculative operations. The previous Bitcoin and Ethereum Spot ETFs in Hong Kong attracted nearly USD 600 million in funding over the first five trading days, but most of this was from liquidity recycling by Asian funds rather than new allocations.

Spot Solana ETF's Impact on Price Discovery and Market Structure

As of the time of writing, the price of Solana hovers around 183 USD and may not react immediately. The effectiveness of the ETF will depend on whether net inflows can continue after the listing week. Historically, price increases related to ETFs tend to lag: the price experienced the most significant volatility nearly two months after the U.S. Bitcoin ETF was listed, when assets under management surpassed 10 billion USD. If institutional investors in Hong Kong view Solana as a strategic allocation rather than a trade, a similar situation could occur with Solana.

The Spot Solana ETF can also narrow the price gap between Asian and US trading sessions. Solana's liquidity typically decreases during the Hong Kong early trading session; the local ETF increases regulated hedging and arbitrage mechanisms, which may enhance market depth. This could stabilize price discovery across regions and reduce the volatility spikes unique to the SOL order book. Over time, this structure may shift some of Solana's trading volume from offshore exchanges to a more transparent framework, making it useful for funds that must comply with custody and audit standards.

From a microstructural perspective of the market, the launch of the Spot Solana ETF will create new arbitrage opportunities. When the ETF price is higher than the Solana Spot price (premium), authorized participants (AP) can buy Solana in the spot market, then create ETF shares and sell them in the secondary market to profit from the price difference. Conversely, when the ETF is at a discount, APs can buy ETF shares and redeem them for Solana Spot to sell. This arbitrage mechanism will closely bind the ETF price to the Spot price while also injecting additional liquidity and trading depth into the Solana market.

Currently, this approval holds both symbolic and practical significance. The symbolic meaning lies in the fact that it marks Solana's evolution from a high-beta DeFi asset to a network with reliable institutional infrastructure. The practical implication is that each share of stock issued in Hong Kong creates direct buying pressure on SOL. The key development is not whether the price can rise on the first day, but whether this ETF can successfully convert speculative enthusiasm into regulated, sustained holdings. If that is the case, Solana's path to mainstream portfolios may accelerate, and Hong Kong may again become a benchmark for the level of development of altcoins in the global financial system.

From a long-term perspective, the success of the Hong Kong Spot Solana ETF could pave the way for other altcoin ETFs. Major public chain projects like Cardano, Avalanche, and Polygon may become the next batch of ETF targets. This will fundamentally change the structure of investors in the crypto market, shifting from a dominance of retail and crypto-native institutions to a more mature market that includes traditional financial institutions. For Solana, this is a key step in transitioning from a “high-risk speculative asset” to a “mainstream investment portfolio allocation.” If the Spot Solana ETF can achieve inflows of 1 to 1.5 billion USD in its first year, it will inject strong confidence into the Solana ecosystem, attracting more developers, users, and businesses.