Solana ETPs see $39M outflow — Is the SOL price top in?
2024.08.19 15:35
Solana exchange-traded products (ETPs) were the least favorite trade for institutional investors as they experienced the most outflows amid modest inflows into crypto funds.
In its Digital Asset Funds Weekly Report published on Aug. 12, asset manager CoinShares revealed that crypto asset investment products saw minor inflows totaling $30 million for the week ending Aug. 16.
Source: CoinShares
According to the report, Solana (SOL) funds felt the brunt of the market correction, experiencing $39 million in outflows from Aug. 12 to Aug. 16. This withdrawal was the “largest on record” for Solana ETPs. Solana funds also bled on monthly performance, with $34.4 million in outflows in August.
Crypto ETP flows by asset. Source: CoinShares
The asset manager attributes the outflows from Solana investment products to declining volumes of memecoins which the layer-1 blockchain has heavily relied on.
CoinShares head of research James Butterfill said,
“Solana saw outflows of US$39m, the largest on record, as it faced a sharp decline in trading volumes of memecoins, on which it heavily relies.”
This is corroborated by data from Dune which reveals that memecoin transaction flows across all blockchains, including Solana, have dropped collectively by 86% from the March top of roughly $999.55 million to $177.75 million the week ending Aug. 18. This suggests that traders’ interest or confidence in the sector has waned lately. This in turn affects the native token of the blockchain they are built on, like Solana’s SOL.
Memecoins total trading volumes. Source: Dune
Comparatively, Bitcoin (BTC) ETPs continued to attract significant interest, with inflows totaling $42 million for the week and outflows of $320 million month-to-date, according to CoinShares. Meanwhile, short-Bitcoin ETFs experienced outflows for the second consecutive week, totaling $1 million.
Multi-asset or altcoin funds also outperformed Bitcoin ETPs in August, with an inflow of $41.4 million month-to-date.
After staging a 20% rebound from Aug. 5 lows, the crypto market has corrected, with the total capitalization dropping to $2.07 trillion by Aug. 19.
The total assets under management of institutional investment products had also dropped slightly from $84.93 billion for the week ending Aug. 9 to $83.76 billion last week.
Total inflows for 2024 have reached $22.16 billion year-to-date as trading volumes across all digital assets dropped by nearly 50% week-on-week to $7.6 billion. CoinShares attributed this decline to “recent macroeconomic data that implied that the Fed was less likely to cut interest rates by 50 basis points in September.”
Meanwhile, the price of SOL has dropped 12% since recovering to $163 on Aug. 9 and is currently trading at $143.50 at the time of publication. Comparatively, the price of BTC has declined by around 4% since recovering to $62,000 and is now trading at $59,001.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
