Solana slides over 20% as ETF frenzy fails to support price

Solana ETFs debuted in the U.S. with record inflows, reflecting institutional interest in its growing prominence. Today, Solana slumped nearly 20%, marking an unexpected divergence from the debut’s record inflows. 

For instance, the BSOL fund recorded the most inflows in its first week, attracting roughly $417 to $421 million in net inflows, placing it among the top 20 ETFs by assets. Bitwise ETF, which launched with $223 million in seed capital, surpassed most notable asset managers such as Grayscale, which launched with only $2.2 million.

BSOL fund leads in inflows with over $65 million this week

Based on on-chain data, Bitcoin and Ethereum ETFs continue to lead in inflows despite an unexpected outflow of more than $25o million last week. SoSoValue data shows that Bitcoin ETFs, including the IBIT ETF, experienced roughly $798 million in outflows over the past week, while Ethereum ETFs demonstrated sustained inflows of $15 million. Bitcoin’s decline below $110,000 was the primary driver of the trend.

Solana’s high-speed transaction, DeFi activity, and the future of tokenized assets and stablecoin settlement infrastructure have placed the token ahead last week. Solana ETFs attracted roughly $44.4 million on Friday alone last week, driving cumulative inflows to around $199.2 million, while total assets under management surpassed $502 million. 

So far, Solana ETFs have attracted $513 million in assets under management, with most of the inflow occurring last week. This week, the funds have seen a 20% drop to around $420 million, marking a significant decline within the weekly timeframe. Based on in-chain data, Solana’s daily inflows stand at $70.5 million, with BSOL drawing in $65.16 million and GSOL attracting $ 5.34 million.

Vincent Liu of Kronos Research revealed that Solana ETFs are surging on fresh catalysts and capital rotation. He added that staking-driven yields and new narratives are pulling in capital from BTC and ETH. According to Vetle Lunde, head of research at K33, the launch of U.S. Solana spot ETFs has been a notable success, drawing in substantial demand from investors despite a significant trend of outflows across other cryptocurrency blockchain networks. 

Solana drops 8% today and more than 30% over the past month

Bitcoin ETFs lost $186.51 million today alone, and a similar trend was observed last week, with a cumulative outflow of $798 million. Ethereum ETFs recorded relatively the same, with a total of $135.6 million in outflows, reducing their cumulative total net inflow to $14.3 billion. 

Bitwise offers a roughly 7% stacking yield, making it the most preferred fund alongside the HSBC-backed Litecoin. The other fund is the HBAR ETF, Grayscale’s Solana Trust conversion, which reflects the broadening landscape of altcoin-based, regulated investment vehicles. 

Liu warned that the ongoing macro volatility may persist into the next few days, but any shift in market sentiment may trigger reversals. Solana has slumped by 8% today and more than 30% over the past month, trading at $162.2, which represents a 9.12% decline on the daily chart at the time of publication. BTC and ETH have also recorded drops, with a 1.5% decline on Bitcoin and a 6.1% drop on the Ethereum blockchain’s native token. On the monthly chart, BTC and ETH recorded 15% and 22% drop, respectively.

Matt Hougan, CIO at Bitwise, maintained his bullish sentiment regarding Solana’s long-term prospects, despite the recent price activity. He argued that investing in Solana is a bet on the network’s role in enabling stablecoin transfers and tokenized assets. He added that if he’s right, then the combination of a growing market and a growing share of that market will boost Solana’s growth.

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