Solana Continues to Attract Institutional Investors Despite Bitcoin and Ethereum Outflows
Digital asset investment products have seen a consecutive week of outflows, with a notable exception in Solana. The past week witnessed significant outflows totaling $726 million from cryptocurrency-based investment products, primarily affecting two major players in the market, Bitcoin and Ethereum, due to the lack of bullish momentum in their spot prices. In contrast, Solana has been defying the broader market trend, attracting investor interest.
Solana has emerged as a favorite among institutional investors, with inflows for the second consecutive week. CoinShares’ latest weekly report on digital asset investment funds reveals that Solana-based investment products received a total inflow of $6.2 million last week, bringing their year-to-date inflows to $47 million. While these inflow numbers may seem modest compared to other digital asset investment products, their significance has been heightened by the prevailing bearish sentiment across the crypto industry in recent weeks.
The negative sentiment has been largely influenced by investor expectations surrounding the U.S. Federal Reserve’s monetary policy, with many anticipating a 25 basis point interest rate cut following strong macroeconomic data. Consequently, a substantial portion of the outflows originated from the United States, with $721 million withdrawn from digital asset investment products, followed by Canada with outflows of $28 million.
Bitcoin bore the brunt of the outflows, with Spot Bitcoin ETFs experiencing outflows every day last week, resulting in total outflows of $643 million for Bitcoin investment products. Ethereum also faced outflows, particularly driven by the Grayscale Trust and Spot Ethereum ETFs, totaling $98 million as investor interest waned amidst broader market concerns.
In contrast, a few other digital assets managed to attract modest inflows, including multi-asset products with $3.4 million, XRP with $1 million, and Litecoin with $0.7 million. Short Bitcoin products, which benefit from declining prices, saw inflows of $3.9 million, reflecting the prevailing bearish sentiment towards Bitcoin.
Interestingly, investment products in Europe ended the week with positive inflows, notably in Germany and Switzerland with inflows of $16.3 million and $3.2 million, respectively. Additionally, regions like Australia and Brazil also experienced inflows into their digital asset markets.
Despite the overall outflows in the digital asset investment landscape, Solana’s resilience and attractiveness to investors have set it apart from the broader market trend, offering a glimpse of optimism amidst the prevailing bearish sentiment.
