Digital asset investment products have seen a second straight week of outflows, but Solana appears to be bucking the trend. Last week in particular saw outflows from cryptocurrency-based investment products, amounting to a substantial $726 million.
Capital outflows were heavily concentrated in two of the largest and most important cryptocurrencies, Bitcoin And Ethereumwhich corresponds to a lack of upward momentum in their spot prices. In contrast, Solana-based investment products continued to defy the general market trend.
Solana remains the favorite of institutional investors
Solana has attracted inbound flows for the second week in a rowwhich is a testament to investors’ growing confidence in the asset. According to CoinShares latest weekly report As for digital asset investment funds, Solana-based investment products saw a total inflow of $6.2 million last week, bringing their year-to-date inflows to $47 million.
While these inflow numbers may be minuscule or small compared to what we have seen with digital asset investment products, the timing has made it timely. a little more important. This is due to the fact that the entire cryptocurrency sector has been gripped by bearish sentiment in recent weeks, which has been reflected among institutional investors, so much so that outflows from digital asset products have matched the largest outflow recorded in March this year.
As CoinShares noted, much of this negative sentiment was fueled by investor expectations regarding the U.S. Federal Reserve’s monetary policy. Many market participants are anticipating a 25 basis point (bps) interest rate cut following stronger-than-expected macroeconomic data from the previous week. As a result, a significant portion of the outflows came from the United States, which saw a staggering $721 million withdrawn from digital asset investment products. Canada was close behind, with outflows of $28 million.
Unsurprisingly, Bitcoin had the lion’s share of outflows as a Bitcoin Spot ETF recorded outputs Last week, Bitcoin investment products saw a total of $643 million in outflows. Ethereum was similarly impacted. Notably, the recently launched Ethereum Spot ETFs, particularly the Grayscale Trust, contributed significantly to the overall outflows. Ethereum investment products saw a total of $98 million in outflows as investor interest in the asset waned alongside broader market concerns.
On the other hand, a few other digital assets managed to buck the trend and attracted modest inflows. Multi-asset products saw inflows of $3.4 million, while XRP and Litecoin saw inflows of $1 million and $0.7 million, respectively. Additionally, Bitcoin short products (which benefit from the price decline) saw inflows of $3.9 million, further highlighting the bearish sentiment surrounding Bitcoin.
Interestingly, investment products in Europe managed to end the week with positive inflows. Germany and Switzerland stood out in particular, recording inflows of $16.3 million and $3.2 million, respectively. Other regions, including Australia and Brazil, also saw inflows of $0.9 million and $3.9 million into their respective digital asset markets.
Featured image created with Dall.E, chart by Tradingview.com
