Institutions love Solana, according to CoinShares’ latest crypto fund report, even when the rest of the crypto space is flat.
“Very little activity was seen in the altcoin space,” wrote James Butterfill, head of research for CoinShares, noting one exception: Solana.
Solana has had a bright 2023, with 27 weeks worth of inflows versus merely four weeks of selloffs. The last seven days were no exception, with institutions pocketing $5 million worth of the asset. According to Butterfill, this has allowed the altcoin to retain the title of “most-loved altcoin this year.”
The success of the one-time “Ethereum killer,” Butterfill told Decrypt, is due to its partnership with many financial institutions, such as payments giant Visa, “while offering ultrafast cheap payments.” He added that despite not having the same number of users or developers that Ethereum boasts, “it has captured the favor of investors.”
Earlier today, the network notched its highest total value locked (TVL) of the year, reaching $338.82 million, according to DefiLlama. Its native token, SOL, has also enjoyed a short-term surge in price, trading at $23.40—a 20% increase on the week.
Along with Solana, Bitcoin has reversed its bearish course, and filed an institutional green week.
The top cryptocurrency notched $20.4 million in inflows over the past several days, fuelled by a combination of factors–including the recent “quagmire” over government funding.
Butterfill explained to Decrypt that although it’s “hard to tell for certain,” he suspects that the impasse in Washington D.C. over budget concessions is behind the spike in interest.
Another factor is that “the timing of inflows is closely linked to the timing of the rise of the 10-year government bond,” he said.
The bulls aren’t completely in charge yet, though. Volumes remain insufferably low, averaging $3 billion daily, a far cry from last year’s $11 billion. These levels, said Butterfill, take us back to 2020.
And there is still a regional disparity among large entities. The U.S. saw outflows worth $19 million, whereas its neighbor to the north, Canada, clocked $17 million worth of buying pressure. Across the pond and into Europe, the old continent saw inflows worth $23 million.
Last, and apparently least, Ethereum continues to live up to its “least-loved altcoin” label for the year. It saw outflows worth $1.5 million, highlighting seven weeks straight of selling, reaching $114 million offloaded over the year.