- Outflows from the Solana fund last week amounted to $5.3 million.
- Bitcoin accounted for much of the inflows, amid an impending spot ETF approval.
The year 2024 started well as investment inflows into digital assets reached $151 million in the first week. Solana, however [SOL] hasn’t contributed much to the funds despite having an impressive year in 2023.
Instead, it recorded more outflows, the CoinShares report revealed.
According to AMBCrypto’s assessment of the weekly report, Solana’s outflows amounted to $5.3 million. There were many reasons for the change in sentiment towards the altcoin. But the most notable of these was Bitcoin [BTC] and the price of SOL.
Although the price of SOL has recovered above $100, the previous week was not good. Based on CoinMarketCap factsSOL price fell below $90 in the first week of January. This was one of the reasons why the seven-day performance continued to decline by 10.12%.
In the case of Bitcoin, there was a lot of optimism surrounding the coin. As a result, the associated inflows were worth $113 million of the total $151 million.
Source: CoinShares
Additionally, AMBCrypto found that anticipation around the adoption of spot ETFs in the US was the main driver of the flow. So it wasn’t surprising that CoinShares’ head of research noted that:
“Although the spot-based ETF has not yet launched in the US, 55% of inflows came from US exchanges, while Germany and Switzerland recorded 21% and 17% respectively.”
Reports from various sources also indicated that approval was close. This was also confirmed by Gary Gensler’s post on X on January 8.
In the position the chairman of the SEC encouraged investors should be careful with crypto assets. Comments under the post pointed to speculation that the crypto-averse regulator had agreed to give the applicants the green light.
Previously there was speculation that it would be a ‘sell the news’ event. However, details from the CoinShares report showed that many participants did not share that sentiment. The report noted:
“If many truly believed that the ETF launch in the US would be a ‘buy the rumor, sell the news’ event, we would certainly expect to see an inflow into short bitcoin ETPs. amounted to $7 million.”
Meanwhile, the sentiment around Solana has changed compared to last week. To reach this conclusion, AMBCrypto examined weighted sentiment, using Santiment’s on-chain data.
According to Santiment, SOL’s weighted sentiment as of January 6 was -0.334. However, at the time of writing, the metric has moved into positive territory.
Source: Santiment
This revival was confirmation that positive comments about the project have exceeded negative comments over the past two days.
Realistic or not, here is the market cap of SOL in ETH terms
If sentiment remains the same through the end of the week, fund flows linked to Solana could increase.
However, the altcoin may have to duke it out with Ethereum [ETH]. Unlike Solana, Ethereum investment products saw inflows totaling $29 million.