Due to their status as the two largest cryptocurrency types by market capitalization and this year’s launches of related spot exchange traded funds in the U.S., bitcoin and ethereum are the digital currencies most widely embraced by professional investors, including institutions.
However, some other cryptocurrencies are climbing those ranks as well. That includes Solana. As of late Tuesday, Solana sported a market value north of $63.4 billion. That makes it the fifth-largest digital asset by that metric. Some ETF issuers have filed for spot Solana ETFs, and while it remains to be seen whether the Securities and Exchange Commission (SEC) allows those products to come to life, those filings are an example of professional investors seeing validity in the cryptocurrency.
Other data points indicate institutional investors believe in Solana. CoinShares’ latest weekly report notes that Solana-linked investment products are on a two-week inflow streak, bringing the year-to-date tally to $47 million. Interestingly, those inflows have accrued against the backdrop of outflows from comparable bitcoin and ether products.
Solana Durability Is Relevant
While it could be a while before spot Solana ETFs come to life in the U.S., professional investors embracing digital currency is important. It signals that they see utility in some of the broader crypto spaces outside of bitcoin and ether.
Additionally, some professional market participants are giving Solana their stamp of approval at a time when its larger rivals are declining. As of late Tuesday, Solana was higher by nearly 6% over the past week. Meanwhile, bitcoin and ether traded lower during that period.
“While these inflow numbers might be minuscule or little to what we’ve seen with digital asset investment products, the timing has made it somewhat more important. This is because the entire crypto industry has been riddled with bearish sentiment in the past few weeks, which has been reflected in institutional investors, so much so that outflows from digital asset products have matched the largest recorded outflow set in March of this year,” reported Scott Matherson for Bitcoinist.
Another noteworthy aspect of institutional investors’ bullish view of Solana is that the cryptocurrency’s platform is widely viewed as the place where many meme coins are born, temporarily thrive, and then ultimately fall by the wayside.
While that may be a dubious distinction, it’s not chasing professional or retail investors away. In fact, recent data indicate that active Solana users hit an all-time high just days ago, with 2.5 million active wallets.
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