“Solana Surges as Institutions Withdraw from Bitcoin, Ethereum”

Investment products focused on digital assets have encountered another week of outflows, yet Solana appears to be an exception to this trend. Last week, cryptocurrency investment products faced substantial withdrawals totaling $726 million.

The withdrawals were predominantly concentrated in two major cryptocurrencies, Bitcoin and Ethereum, reflecting their stagnating spot prices. In stark contrast, investment products centered on Solana have consistently resisted the wider market decline.

Solana Remains a Preferred Choice for Institutional Investors

For the second week in a row, Solana has drawn in inflows demonstrating increasing investor confidence in the asset. According to the latest weekly report from CoinShares on digital asset investment funds, Solana-focused products saw a total inflow of $6.2 million last week, bringing their year-to-date totals to $47 million.

While these inflow figures may seem trivial compared to the broader market, their timing is noteworthy. The entire cryptocurrency sector has been plagued by bearish sentiment in recent weeks, leading to outflows from digital asset products that matched the all-time high outflow recorded in March.

As highlighted by CoinShares, much of this negative sentiment stems from investor anticipations regarding the monetary policy of the U.S. Federal Reserve. Many market observers expect a 25 basis point (bp) interest rate cut in light of unexpectedly strong macroeconomic data from the prior week, resulting in a significant outflow of $721 million from digital asset products in the United States alone. Canada followed with outflows of $28 million.

As expected, Bitcoin accounted for the majority of the outflows, with Spot Bitcoin ETFs documenting outflows daily throughout the last week. Consequently, Bitcoin investment products faced outflows totaling $643 million. Ethereum was similarly affected, with the newly launched Spot Ethereum ETFs, particularly the Grayscale Trust, contributing significantly to the total withdrawals. Ethereum investment products recorded outflows totaling $98 million as interest in the asset dwindled amid broader market uncertainties.

Conversely, a few other digital assets succeeded in attracting modest inflows. Multi-asset products garnered $3.4 million in inflows, while XRP and Litecoin recorded inflows of $1 million and $0.7 million, respectively. Additionally, short Bitcoin products (which profit from decreasing prices) saw inflows of $3.9 million, underscoring the negative outlook surrounding Bitcoin.

Interestingly, investment products in Europe ended the week with positive inflows, particularly in Germany and Switzerland, which reported inflows of $16.3 million and $3.2 million, respectively. Other regions, such as Australia and Brazil, also experienced inflows, with $0.9 million and $3.9 million entering their respective digital asset markets.