Solana ETP Sees $39 Million Outflows — Has SOL Price Peaked?

The Solana exchange-traded product (ETP) was the least preferred trading product for institutional investors, with the largest outflows while the largest inflows into cryptocurrency funds.

Asset manager CoinShares said in its weekly report on digital asset funds published on August 12 that crypto asset investment products saw a total of $30 million in small-scale inflows in the week ending August 16.

According to the report, the Solana (SOL) fund felt the impact of the market correction the hardest, experiencing $39 million in outflows from August 12 to August 16. This withdrawal was the “largest on record” for the Solana ETP. The Solana fund also suffered a loss in its monthly performance in August, with $34.4 million in outflows.

The asset manager attributed the outflows from Solana’s investment product to a decline in trading volumes for Mimecoin, which the Layer 1 blockchain relies heavily on.

CoinShares Research Director James Butterfill said:

“Solana saw its largest outflow on record, $39 million, as trading volumes in the heavily reliant Mimecoin dropped sharply.”

This is also supported by data from Dune, which shows that memecoin transaction flow across all blockchains, including Solana, has fallen 86% from its March high of around $999.55 million to $177.75 million in the week ending August 18. This suggests that trader interest or confidence in this sector has waned recently. This in turn has implications for the native tokens of the blockchains they are built on, such as Solana’s SOL.

Bitcoin (BTC) ETPs, by comparison, continued to attract significant interest, with inflows totaling $42 million this week and outflows of $320 million this month, according to CoinShares. Meanwhile, short Bitcoin ETFs experienced outflows for the second straight week, totaling $1 million.

Multi-asset or altcoin funds also outperformed Bitcoin ETPs in August, with $41.4 million in inflows so far this month.

Since rebounding 20% ​​from its lows on August 5, the cryptocurrency market has been in a correction, with the total market cap falling to $2.7 trillion as of August 19.

Total assets under management for institutional investment products also decreased slightly, from $84.93 billion in the week ended August 9 to $83.76 billion last week.

Total inflows in 2024 reached $22.16 billion since the start of the year, with trading volume across all digital assets down nearly 50% week-over-week to $7.6 billion. CoinShares attributed the decline to “recent macroeconomic data suggesting the Fed is less likely to cut rates by 50 basis points in September.”

Meanwhile, the price of SOL has fallen 12% since recovering to $163 on August 9th and is currently trading at $143.50 at the time of publication. In comparison, the price of BTC has fallen about 4% since recovering to $62,000 and is currently trading at $59,001.

This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.