September 5, 2023 at 11:45 GMTModified date: September 5, 2023 at 12:45 GMT
September 5, 2023 at 11:45 GMT

Solana enjoys ninth consecutive week of inflows

Solana has emerged as the top choice in altcoin category for the past nine weeks, enjoying positive fund inflows.

Solana enjoys ninth consecutive week of inflows

Solana ($SOL) has emerged as the top choice in altcoin category for the past nine weeks, enjoying positive fund inflows. This comes in the background of continued outflows for other major coins in the market.

As reported by CoinShares in its weekly report on digital asset fund flows, Solana posted a total fund inflows of about $0.7million in the past week. In the past nine weeks, it accumulated a chunk of $14.1m in inflows.

Crypto market down while Solana remains solid

Other altcoins like Ethereum ($ETH) and Polygon ($MATIC) struggled with an outflow of $3.2m and $8.6m, respectively, during this time. On the other side, Bitcoin ($BTC), which is the biggest digital asset by market cap, registered inflows worth $3.8m. This happened as institutional investors were noted pulling out of short Bitcoin products for the 19th consecutive week. Its total assets under management (AuM) have fallen 48% from this year’s peak too.

In the bigger picture, digital asset fund flow was in the negative too, recording an outflow of about $11.2. Total outflows in the past seven weeks came to about $342m. Blockchain equities saw outflows for the fourth week too, totalling $25m. The report also noted digital asset investment product flows to have cooled off, with this relatively minor outflows.

On the positive side, trading volumes were observed to be much higher than average despite little activity on flows. The figure totalled $2.8bn for the week, which is 90% above the year-to-date (YTD) average.

CoinShares noted that this was much driven by the hopes and concerns for regulation on digital assets. The beginning of last week saw investors with high hopes for a spot exchange-traded fund (ETF) approval in the US, only to be followed by further delays for all other spot ETF applications.

Is Solana the most loved Altcoin?

Solana’s immunity to the wave of crypto outflows, with YTD inflows of $26 million, positioned the coin as one of the most loved altcoins amongst investors at present. This comes in the background of several positive developments within the network, along with its improved performance and reliability.

Solana boasts a range of mainstream companies supporting the Solana ecosystem, ranging from Google to Stripe and Discord. It has a total market capitalisation of about $7.9bn and a 24-hour traded volume of approximately $253m.

The mainnet suffered network outage only once this year. MakerDAO co-founder, Rune Christensen, also proposed considering the Solana codebase as the basis for his project’s new native chain.

This was soon followed by the news of Shopify integrating Solana Pay with its payment options, leveraging USDC’s stability. The Solana ecosystem boasts an impressive congregation of over 11.5 million active accounts and the unveiling of its protocol, Solana Pay, marked a significant stride in decentralised payment systems.

Last month, Encryption protocol Elusiv also launched a new feature for private token swaps on the Solana blockchain. The development allowed users to swap between a number of assets without revealing any identifying information about them, pioneering private exchange of decentralised assets on the blockchain.

However, the Solana ecosystem seemed to still struggle with the after-effects of the FTX and Alameda Research collapse which happened last year. FTX held over $1 billion in Solana and its related coins, potentially adding further liquidation pressure on the back of the current administration seeking to make creditors whole again.

Several analysts also noted FTX-related wallets transferring SPL tokens through a Wormhole bridge to the Ethereum network over the weekend. This sparked the existing fears of possible liquidation.

At the time of press, $SOL was noted trading in the red too as its price declined by over 3% in the last week. The altcoin is currently changing hands for $19.48, down by over 1% in the last 24 hours.

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