Solana ETFs Hold Firm While $2 Billion Withdrawn from BTC and ETH

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A new weekly report issued by CoinShares has revealed unusual behavior of institutional investors over the past two weeks. For the second consecutive week, investors have withdrawn more than $1 billion from various crypto products, bringing the total to $2 billion. This is a clear signal that they prefer to allocate funds cautiously amid the current macroeconomic uncertainty and the recent volatility avalanche that hit Bitcoin and Ethereum, pushing their prices down significantly.

Still, despite this largely negative news, there is a significant silver lining – the recently launched Solana spot ETFs, which were launched in late October. While institutions have been taking money out of Bitcoin and Ethereum-based products, Solana ETFs have been attracting large funds. Over the past two weeks, those ETFs have seen inflows of more than $350 million in total. This has marked one of the best debuts in the recent history of the cryptocurrency space as financial institutions started pouring their money in it.

Bitcoin and Ethereum lose $2 billion

Data shared by CoinShares revealed that just over the last week, large investors have again withdrawn slightly more than $1 billion from investment tools based on digital assets. Thus, they extended last week’s losses, taking out one billion dollars for the second week in succession. The main cryptos, on which those tools were based, are Bitcoin and Ethereum, but also Cardano and Sue. Such assets as XRP, Solana, Zcash, and Litecoin showed positive net flows over the above-mentioned period of time.

While Bitcoin products have lost $932 million, those based on Ethereum faced withdrawals of $438 million over the past week and this month overall, respectively.

Experts believe that these continuous withdrawals are the result of profit-taking made by traders after the recent bull runs of Bitcoin and Ethereum, as well as of macroeconomic instability that surrounds the recent moves of the US Federal Reserve. Besides, these giant withdrawals show that markets are exhausted after the recent gigantic inflows into the two largest cryptocurrencies. Some traders expect short-term corrections to come soon now that large crypto holders are reshuffling their portfolios after Bitcoin failed to reach a new all-time high this month and was pushed down below the psychological level of $100,000.

CoinShares pointed out that even these outflows do seem extensive, investors are withdrawing funds after a long phase of accumulation that began earlier this year. The report says that this could be just a part of a healthy rotation of capital as it exits BTC and ETH products, but will be sent into other cryptocurrencies.

Solana ETFs continue to attract large funds

Despite the overall weakness the crypto market is experiencing at the moment, Solana products, mostly spot ETFs, have demonstrated firm and exceptional resilience, while investors’ demand for SOL is growing. Since their launch in late October, spot Solana ETFs have been quite successful in attracting funds.

Over the past eleven days, they have scooped up approximately $350 million in net inflows. This bullish Solana sentiment is striking in the current overall negative investor sentiment related to other leading digital currencies and products powered by them.

Solana ETFs launched by Grayscale, Bitwise, and other wealth managers have been described by analysts as one of the strongest starts for new crypto products recently, following the successful launch of Bitcoin spot ETFs last year.

Investor enthusiasm towards Solana seems to be driven mostly by SOL’s growing role and adoption in the decentralized finance (DeFi) sphere, non-fungible tokens (NFTs), as well as real-world asset tokenization – the spheres where Solana is contending with Ethereum. SOL’s transaction speed greatly surpasses that offered by Ethereum and other layer-1 chains. Besides, its community of developers is expanding quickly, and SOL is now turning to be the third most popular crypto investment tool for institutions after Bitcoin and Ethereum.

Still, despite the success that Solana ETFs are showing, exchange-traded funds powered by Bitcoin and Ethereum continue to dominate this sector of the crypto market in terms of total assets under management (AUM). According to recent analytics data, BTC and ETH funds have absorbed $532 million over the past week, thus leaving Solana ETFs far behind. Collectively, Bitcoin and Ethereum funds are holding more than $60.4 billion worth of assets at the moment, with BlackRock as a leading holder.

Bitcoin maintains its role as the asset preferred by the majority of institutions for crypto exposure – nearly 80% of all crypto ETF assets are represented by BTC. Despite the large outflows, Bitcoin and Ethereum remain the main focus of financial institutions in the crypto space so far.

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