Solana has just recorded its highest weekly inflow for the year.
The altcoin is now seen as a viable alternative to Ethereum by institutional investors.

Solana has recently garnered significant attention with a notable influx of institutional investments in the preceding weeks. As a formidable competitor to the Ethereum (ETH) Layer-1 blockchain, Solana has witnessed a surge in institutional buyers, marking its highest weekly inflow in months.

Solana Inflows Outshines Peers as Investor Favorite

According to CoinShares’ latest Digital Asset Fund Flows Weekly Report, the altcoin reached a substantial $23.9 million, a level that hasn’t been witnessed since March 2022. This surge underscores the growing recognition and adoption of Solana as a blockchain platform of choice among the big money spenders. 

The platform’s appeal lies in its scalability, high transaction throughput, and comparatively lower fees, making it an attractive alternative to Ethereum for certain use cases.

Also, the data revealed that digital asset investment products saw inflows totaling $78 million for the second week, while trading volumes for Exchange-Traded products (ETPs) witnessed a 37% rise to $1.13 billion. 

Meanwhile, Bitcoin recorded the highest inflows worth $43 million, but some investors capitalizing on recent price strength began shorting BTC product positions. As such, the short Bitcoin positions resulted in inflows of $1.2 million in the same period of time.

Recall that at the beginning of the month, CoinShares’ reports revealed that Solana marked its 27th week of net positive inflows this year, registering a significant $5 million. Such consistent performance, with merely four weeks of outflows, aptly labels Solana as one of the most admired altcoins of 2023.

Furthermore, the influx of funds into Solana highlights a broader trend in the cryptocurrency space, where investors are actively seeking projects that offer innovative solutions and address the scalability challenges faced by earlier blockchain networks. Solana’s ability to provide a scalable and efficient platform positions it as a frontrunner in meeting these evolving market demands.

However, on the flip side, Ethereum’s appeal seems to be waning. For seven consecutive weeks, Ethereum experienced outflows, this time amounting to $1.5 million. Positioning it paradoxically as the week’s least favored altcoin.

Crypto Markets: The Future Path

While Bitcoin and Ethereum continue to dominate headlines, it is essential to note that other tokens are charting their success stories. Solana, for instance, has recorded inflows for 28 weeks this year, with just four weeks of outflow. The driving factors behind such rallies are often multifaceted. High funding rates on futures and regular payments made by traders in the perpetual futures market are among the potential contributors.

These payments help ensure consistent market participation and foster liquidity. The crypto community remains watchful as November approaches, with potential Bitcoin Exchange Traded Fund (ETF) approvals at the top of the agenda. The combination of regulatory decisions, market dynamics, and institutional interest will define the trajectory of Bitcoin and other digital assets in the days to come.

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Filed under: Bitcoin - @ October 10, 2023 1:21 pm