Solana Remains Institutional Investors' Favorite as Bitcoin and Ethereum See Consecutive Weeks of Outflows

Digital asset investment products have experienced a second consecutive week of outflows, but Solana looks to be bucking the trend.

Digital asset investment products have seen a second consecutive week of outflows, but Solana seems to be bucking the trend.

Last week saw a massive outflow of $726 million from cryptocurrency-based investment products. The outflows were largely concentrated in two of the biggest and most popular cryptocurrencies, Bitcoin and Ethereum, which corresponded with a lack of bullish momentum in their spot prices.

However, Solana-based investment products continued to defy the broader market trend.

Solana remains institutional investors’ favorite

Solana has attracted inflows for the second consecutive week, indicating growing investor confidence in the asset. According to CoinShares’ latest weekly report on digital asset investment funds, Solana-based investment products witnessed a total inflow of $6.2 million last week, bringing their year-to-date inflows to $47 million.

While these inflow numbers may be small compared to what we’ve seen with digital asset investment products, the timing has made it somewhat more noteworthy.

The entire crypto industry has been gripped by bearish sentiment in the past few weeks, which has also been reflected in institutional investors, to the extent that outflows from digital asset products have matched the largest recorded outflow, set in March of this year.

According to CoinShares, much of this negative sentiment has been driven by investor expectations surrounding the U.S. Federal Reserve’s monetary policy.

Many market participants anticipated a 25 basis point (bp) interest rate cut following stronger-than-expected macroeconomic data from the previous week. As a result, the majority of the outflows were concentrated in the United States, which saw a staggering $721 million withdrawn from digital asset investment products. Canada followed behind, experiencing outflows of $28 million.

Unsurprisingly, Bitcoin had the lion’s share of outflows as Spot Bitcoin ETFs registered outflows every single day last week. In total, Bitcoin investment products clocked out at $643 million in outflows.

Ethereum was also hit hard. Notably, the recently launched Spot Ethereum ETFs, particularly the Grayscale Trust, contributed significantly to the overall outflows.

As investor interest in the asset waned alongside broader market concerns, Ethereum investment products saw a total of $98 million in outflows.

On the other hand, a select few digital assets bucked the trend and managed to attract modest inflows. Multi-asset products saw $3.4 million in inflows, while XRP and Litecoin recorded inflows of $1 million and $0.7 million, respectively.

Additionally, short Bitcoin products (which benefit from declining prices) experienced inflows of $3.9 million, further highlighting the bearish sentiment surrounding Bitcoin.

Interestingly, investment products in Europe managed to finish the week with positive inflows. Germany and Switzerland stood out in particular, recording inflows of $16.3 million and $3.2 million, respectively. Other regions, including Australia and Brazil, also saw inflows, with $0.9 million and $3.9 million flowing into their respective digital asset markets.

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