Solana ETPs Witness Large Outflow
20 Aug, 2024 ● Coin news
Solana exchange-traded products (ETPs) were the least favored by institutional investors, experiencing the largest outflows amidst modest inflows into crypto funds.
In its Digital Asset Funds Weekly Report, published on Aug. 12, asset manager CoinShares reported that crypto asset investment products saw minor inflows totaling $30 million for the week ending Aug. 16.
According to the report, Solana funds bore the brunt of the market correction, with $39 million in outflows between Aug. 12 and Aug. 16.
This withdrawal was noted as the “largest on record” for Solana ETPs.
Additionally, Solana funds suffered a poor monthly performance, with $34.4 million in outflows in August.
CoinShares attributed the outflows from Solana investment products to declining volumes of memecoins, on which the layer-1 blockchain has heavily depended.
CoinShares head of research James Butterfill commented:
“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 supported by data from Dune, which shows that memecoin transaction flows across all blockchains, including Solana, have collectively dropped by 86% from the March peak of approximately $999.55 million to $177.75 million in the week ending Aug. 18.
This suggests a recent decrease in traders’ interest or confidence in the sector, impacting the native token of the blockchains they are built on, such as Solana’s SOL.
In contrast, Bitcoin ETPs continued to attract significant interest, with inflows totaling $42 million for the week, despite outflows of $320 million month-to-date, according to CoinShares.
Meanwhile, short-Bitcoin ETFs saw outflows for the second consecutive week, totaling $1 million.
Multi-asset or altcoin funds outperformed Bitcoin ETPs in August, with an inflow of $41.4 million month-to-date.
After a 20% rebound from the Aug. 5 lows, the crypto market has corrected, with total capitalization dropping to $2.07 trillion by Aug. 19.
The total assets under management for institutional investment products also slightly decreased, 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 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 fallen 12% since recovering to $163 on Aug. 9 and is currently trading at $143.50 at the time of publication.
In comparison, the price of BTC has declined by around 4% since recovering to $62,000 and is now trading at $59,001.
Sources:
https://cointelegraph.com/news/solana-etps-see-39-m-outflow-is-the-sol-price-top-in
https://blog.coinshares.com/volume-196-digital-asset-fund-flows-weekly-report-780616a8e754
