10-Q: 21Shares Solana ETF Reports Q2 2026 Results Amidst SOL Decline

The 21Shares Solana ETF (TSOL) reported a significant decrease in net assets and Solana holdings for the second quarter of 2026, driven by a substantial drop in SOL's market price and increased share redemptions.

Summary

• The 21Shares Solana ETF (TSOL) experienced a substantial decline in its net assets and the value of its Solana holdings during the second quarter of 2026.
• Net assets decreased by 50.35% from $5,735,019 on December 31, 2025, to $2,847,364 on June 30, 2026.
• This decline was primarily attributed to a 40.62% drop in the price of Solana (SOL), from $123.97 to $73.61 during the same period.
• The ETF also saw a net decrease in outstanding shares, with 140,000 shares redeemed compared to 80,000 shares created in the first six months of 2026.
• Staking rewards generated $41,460 in income for the first six months of 2026, offset by expenses including Sponsor Fees ($3,531) and Staking Fees ($4,146).
• The ETF announced a voluntary waiver of the Sponsor Fee for one year, starting July 28, 2026.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative sentiment due to significant declines in Solana's value and the ETF's net assets, alongside substantial share redemptions, despite a recent fee waiver.

Positives

• The Sponsor has voluntarily waived the Sponsor Fee for a period of one year, beginning July 28, 2026, and ending July 27, 2027, which will reduce expenses.
• The Trust generated staking rewards of $18,105 for the three months ended June 30, 2026, and $41,460 for the six months ended June 30, 2026.
• The Trust intends to operate as a grantor trust for U.S. federal income tax purposes, with a safe harbor provided by the Treasury Department and IRS for staking activities.

Negatives

• The Net Asset Value (NAV) per Share decreased from $12.47 at the end of 2025 to $7.12 as of June 30, 2026, representing a significant loss for shareholders.
• The total return at NAV for the six months ended June 30, 2026, was -40.21%.
• There was a substantial net decrease in capital shares, with 140,000 shares redeemed compared to 80,000 shares issued in the first six months of 2026.
• The fair value of the Trust's investment in Solana decreased from $5,770,226 at December 31, 2025, to $2,847,452 at June 30, 2026.
• Significant net realized and unrealized losses were recorded, totaling $(1,634,374) for the six months ended June 30, 2026.

Risks

• The Trust's investment strategy is concentrated solely in Solana, maximizing exposure to market risks associated with this single digital asset.
• Any decrease in the value of Solana is expected to directly reduce the value of an interest in the Trust, with no offsetting gains from diversified assets.
• There remains a risk of adverse regulatory or legal determinations that could affect the tax treatment of the Trust as a grantor trust or impact its operations.
• Temporary lock-up periods or transfer restrictions from staking could limit the Trust's ability to meet redemption requests.

Future Outlook

The Trust's investment objective remains to track the performance of Solana, adjusted for expenses, and reflect staking rewards. The Sponsor has provided notice to terminate the licensing agreement for the current pricing benchmark (CME CF Solana-Dollar Reference Rate) effective August 31, 2026, and intends to enter into a new agreement with FTSE International Limited around August 24, 2026. This change is not expected to materially impact the Trust's NAV, fair value of Solana, or results of operations.

Management Comments

• The Sponsor has agreed to voluntarily waive the Sponsor Fee for a period of one year beginning on July 28, 2026, and ending on July 27, 2027.
• The change in pricing benchmark provider is not expected to have a material impact on the Trust's net asset value, the fair value measurement of the Trust's solana, or the Trust's results of operations, and does not represent a change in accounting principle.

Industry Context

StockSavvy.ai notes that the performance of the 21Shares Solana ETF is intrinsically linked to the volatility of the Solana cryptocurrency. The significant decline in SOL's price during this period is a common theme across many digital assets, impacting the value of crypto-focused ETFs. The transition to a new pricing benchmark provider is a strategic move to ensure continued tracking accuracy and market relevance.

Comparison to Industry Standards

• The Trust's performance is directly tied to Solana's price movements, which have been highly volatile. For instance, the 40.62% decline in SOL's price from December 31, 2025, to June 30, 2026, is a significant factor impacting the ETF's NAV.
• Compared to traditional ETFs tracking equities or bonds, crypto-based ETFs like TSOL exhibit much higher volatility due to the underlying asset's nature.
• The staking rewards mechanism is a feature aimed at generating yield, which is a strategy increasingly adopted by digital asset funds to offset management fees and enhance returns, though the net impact depends on staking yields and associated fees.

Legal Proceedings

• As of June 30, 2026, the Trust was not subject to any material legal proceedings, nor are any material legal proceedings threatened against the Trust.

Related Party Transactions

• The Sponsor, 21Shares US LLC, is a related party to the Trust.
• As of June 30, 2026, the Sponsor owned 20,000 Shares of the Trust.
• The Sponsor Fee is paid to the Sponsor for services performed under the Trust Agreement.
• The Staking Fee is paid to the Sponsor, representing 10% of the staking rewards generated by the Trust's Staking Activities after deduction of Staking Provider Consideration.

Stakeholder Impact

• Shareholders have experienced a significant decrease in the value of their investment due to the decline in Solana's price and the ETF's NAV.
• The voluntary waiver of the Sponsor Fee for one year is a positive development for shareholders, potentially improving net returns.
• The change in pricing benchmark provider is not expected to materially impact shareholders, as the new provider will be used to develop and market the Trust.

Next Steps

• The Sponsor will enter into a licensing agreement with FTSE International Limited for index data on or about August 24, 2026.
• The current pricing benchmark licensing agreement with CF Benchmarks Ltd. terminates effective August 31, 2026.
• The Sponsor Fee waiver will be in effect from July 28, 2026, to July 27, 2027.
• The Trust will continue to seek to track the performance of Solana and reflect staking rewards.

Key Dates

Recommendation

The significant decline in Solana's price and the ETF's NAV, coupled with substantial share redemptions, presents a negative outlook. However, the voluntary waiver of the Sponsor Fee for one year offers a potential upside for future returns. Given the inherent volatility of digital assets and the recent performance, a 'hold' recommendation is prudent, awaiting stabilization or a clear upward trend in SOL's price and the ETF's performance.

Keywords

Solana ETF, TSOL, Digital Asset, Cryptocurrency, Staking Rewards, ETF, Quarterly Report, Solana