Institutions Favor Solana Despite Flat Altcoin Market
According to CoinShares’ latest crypto fund report, institutions are showing great interest in Solana, even when the rest of the altcoin market remains stagnant. James Butterfill, head of research for CoinShares, noted that there was minimal activity in the altcoin space except for Solana. The altcoin has experienced significant inflows throughout 2023, with 27 weeks of inflows and only four weeks of selloffs. In the past week alone, institutions have invested $5 million in Solana, solidifying its position as the most popular altcoin this year.
Butterfill attributes Solana’s success to its partnerships with financial institutions like Visa and its ability to provide fast and affordable payments. Despite having fewer users and developers compared to Ethereum, Solana has captured the favor of investors.
Solana Achieves Highest Total Value Locked (TVL) and Price Surge
Earlier today, Solana reached its highest TVL of the year at $338.82 million, according to DefiLlama. Additionally, its native token SOL has experienced a short-term price surge, trading at $23.40 with a 20% increase over the week.
Bitcoin has also reversed its bearish trend and recorded institutional inflows worth $20.4 million in recent days. The spike in interest is believed to be influenced by factors such as the ongoing government funding dispute in Washington D.C. and the rise of the 10-year government bond.
Low Volumes and Regional Disparity
Despite the positive developments, trading volumes remain low at an average of $3 billion daily compared to last year’s $11 billion. Additionally, there is a regional disparity among large entities. The U.S. witnessed outflows of $19 million, while Canada saw buying pressure worth $17 million and Europe experienced inflows worth $23 million.
Ethereum Continues to Face Selling Pressure
On the other hand, Ethereum continues to be the “least-loved altcoin” with outflows worth $1.5 million and seven consecutive weeks of selling, resulting in a total offload of $114 million this year.
Hot Take: Solana Emerges as the Preferred Altcoin for Institutions
Solana’s impressive performance in terms of institutional interest and inflows sets it apart from other altcoins in a relatively stagnant market. Its partnerships with major financial institutions and ability to offer fast and affordable payments have contributed to its popularity among investors. With its highest TVL and a surge in price, Solana continues to gain momentum. Meanwhile, Bitcoin also experiences institutional inflows driven by factors like the government funding dispute. However, Ethereum remains under pressure with consistent outflows. The altcoin landscape is evolving rapidly, and Solana seems to be leading the way as institutions’ preferred choice.
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