Institutional Traders Are Willing to Embrace Solana

Institutional traders turned to Solana as demand for Bitcoin as well as Ether exposure has flattened, with SOL investment products representing a whopping 86.6% of total weekly inflows crypto investment products last week. 

Between September 6 and September 10 Solana investment products saw inflows of $49.4 million. Importantly, the combined total inflows for crypto investment products equated to $57 million for the week. Solana saw a 275% week-over-week increase to represent 86.6% of the total flow. The overflowing inflows coincided with the price of SOL gaining 36% over the same period. Thanks to a combination of price appreciation and inflows Solana’s assets under management rose $97 million.

 

Solana, Ripple, and others

For the fourth consecutive week, the digital asset products saw inflows, with demand for altcoins significantly outweighing the appetite for Bitcoin products which saw minimal inflows of $200,000. 

It is worth noting that, the inflows were also partially offset by international investors. They offloaded $6.3 million worth of Ether exposure as the underlying asset’s price fell 10% during the week. 

Interestingly, institutional flows ADA-tracking products saw a 46% decrease in inflows compared to the previous week. Cardano’s highly anticipated introduction of smart contracts on September 13 failed to support them. 

This week Cardano announced the completion of its Alonzo hard fork, ushering in its long-awaited smart contract functionality. Ethereum’s co-founder Charles Hoskinson founded Cardano which is a public blockchain. It promised to compete with Ethereum’s dominance in hosting DeFi and Web 3.0 applications. But the project was unable to deliver smart contract functionality until now despite launching in 2017. 

Solana is not alone as multi-asset products, Ripple, Polkadot, as well as Bitcoin Cash also saw serious inflows. 

Currently, institutional asset managers represent a total AUM (Assets Under Management) of $56.3 billion combined. It fell 9% compared to the previous week as the broader crypto markets experienced a pullback across the board. 

Several asset managers suffered serious losses. CoinShares XBT and Purpose funds dropped $24.7 million and $45.5 million respectively. Meanwhile, 21Shares, ETC Group, as well as CoinShares saw inflows of $75 million, $13 million and $6.1 million respectively. 

Major institutional manager Grayscale remained dominant, representing 74% of sectors AUM with $41.8 billion. On September 13, it announced a partnership with an alternative asset fintech provider iCapital. As part of an agreement, iCapital’s advisors will offer the iCapital’s net-worth customers access to Grayscale’s digital asset services.