Solana (SOL) Outflows Surge Unprecedentedly Amid Regulatory Uncertainties

Solana outflows surged to an all-time high of $39 million last week. This development comes amid broader market movements influenced by recent macroeconomic data.

Solana (SOL) outflows reached an all-time high of $39 million last week, amidst broader market movements influenced by recent macroeconomic data and regulatory developments. These outflows come as the cryptocurrency faces increased scrutiny over its status as a security following the SEC’s lawsuit against Yuga Labs.

Solana Outflows Hit Record High

According to data from CoinShares, SOL investment products experienced outflows of $39 million last week, marking the highest outflow on record for the cryptocurrency. These outflows come amid a broader slowdown in trading activity, particularly in meme coins, which heavily impacted SOL outflows.

Solana outflows were part of a larger trend in digital asset investment products, which saw minor inflows totaling $30 million last week. However, these inflows varied significantly across assets and regions.

Bitcoin (BTC) led the inflows with $42 million, indicating sustained investor interest in spot Bitcoin ETFs and the BTC price. Short-Bitcoin ETPs also saw outflows for the second consecutive week, to the tune of $1 million, suggesting that investors are less inclined to bet against BTC’s performance in the current market climate.

Meanwhile, Ethereum (ETH) recorded inflows of $4.2 million amidst Solana outflows. However, these inflows varied substantially by provider. New entrants in the Ethereum ETF space saw significant inflows of $104 million, while asset manager Grayscale's ETH products experienced outflows of $118 million.

Solana ETF Applications in Limbo

Solana outflows also come as the fate of SOL ETFs remains uncertain. Recently, filings for SOL ETFs by VanEck and 21Shares were removed from the Chicago Board Options Exchange (Cboe) website, sparking concerns about the regulatory approval and future of these investment products.

Both VanEck and 21Shares filed for spot Solana ETFs with the SEC in March 2023. These ETFs would track the price of SOL and provide investors with exposure to the cryptocurrency. However, the SEC has yet to approve any spot ETFs for any cryptocurrency.

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