In the world of cryptocurrencies, the allure of the “most loved altcoin” occasionally shifts between different digital assets. Recently, however, it seems Solana has taken the lead. According to a recent report by CoinShares, Solana has sustained consistent inflows over the past nine weeks, an impressive feat in a market experiencing broad outflows from crypto investment products.
As CoinShares’ head of research, James Butterfill, highlighted, trading volumes in the past week for crypto investment products surged 90% beyond the year-to-date average. But despite this uptick in activity, there was a notable drop in crypto product outflows, which totaled $11.2 million. Over the past seven weeks, turnover has been exceptionally negative, leading to $342 million deserting crypto products.
Interestingly, amidst this shift away from crypto products, Solana bucked the trend. The altcoin saw weekly inflows of $700,000 for the ninth consecutive week. Since the start of 2023, inflows into Solana products have clocked $26 million, unfazed by the wider market’s exodus.
The report doesn’t overlook the positive developments linked to Solana. On Sep. 1, the network’s reputation benefited from the proposal from MakerDAO co-founder, Rune Christensen, to construct the project’s upcoming native chain off a fork of Solana’s codebase. A significant endorsement since MakerDAO has long-held links to Ethereum.
Moreover, Shopify’s recent addition of Solana-based payment network Solana Pay augmented the excitement surrounding the altcoin. Such favourable events likely contribute to Solana’s inflows, and its increasing appeal amongst investors, against the broader market trend.
However, it’s essential to exercise caution amidst such optimism. While surges in investment always paint a rosy outlook, Solana’s price mirrors a different reality. Since the start of the year, the altcoin’s value has remained relatively flat and down a full 92.5% from its November 2021 euphoric peak of nearly $260. The reasons behind its stagnating price remain ambiguous despite strong investment inflows.
Also, beneath the surface of any rosy outlook, risks exist within the crypto spaces as evident in the recent $41.3 million hacking episode with crypto betting platform, Stake, just this month.
Despite having a favored altcoin status and managing consistent inflows amidst broader crypto market outflows, Solana’s prospects remain uncertain. Its sustained appeal amongst investors and promising developments provide a bullish sentiment. Yet, the disconnection between investment inflows and price performance presents a sobering counter-narrative. Crypto enthusiasts would benefit tremendously from tracking these investing trends and market fluctuations while always being aware of the potential pitfalls that lurk within the dynamic landscape.
Source: Cointelegraph
