55 Interactions, 10 Today
Without a doubt, $100k is a critical threshold for Bitcoin. Several of our recent evaluations have shown that the king-coin is on track to reach a 6-digit valuation by the end of the year. The successful execution of the aforementioned accomplishment would undoubtedly be written down in the annals of crypto-history.
However, when looking at absolute returns, a jump from the present $40k price band to $100k would equate to a 1.5x increase. On the other hand, “introverted” altcoins like AVAX, FTM and NEAR have consistently been outperforming the broader market of late. Without much support received from either Bitcoin or Ethereum, this altcoin pack has been well-led by Solana.
During mid-August, SOL’s pricing consistently hovered around the $40k mark. In just over three weeks, the alt’s valuation climbed to its all-time high of $216. The 4x increase in such a short period of time drew the attention of practically everyone in the crypto sector. In retrospect, both large and small investors have turned their focus to alts, leaving Bitcoin and Ethereum behind.
As per CoinShares’ latest weekly report, digital asset investment products witnessed a cumulative inflow worth $57 million last week. By and large the inflow was ushered-in by Solana. As such, during last week’s market dip, Solana’s price was a stalwart. Having risen by 24% week-on-week, Solana managed to outperform a basket of the top 10 digital assets by 34%.
CoinsShares’ report further noted,
“This was reflected with inflows, dwarfing any other digital asset, totalling almost US$50m. A combination of price appreciation and inflows now brings Solana’s assets under management (AuM) to US$97m, the 5th largest of all investment products.”
In comparison, Bitcoin’s inflows stayed as low as $0.2 million, while Ethereum experienced an outflow of $6.3 million during the same time period. Furthermore, the diversification trend among investors continues, with inflows into ADA, multi-asset, XRP, and DOT totalling slightly more than $12 million.
The flows were mostly supported through 21 Shares, ETC Group, and CoinSharesPhysical, as shown in the attached chart.
Can Solana continue to remain the institutional pet?
To some extent, Solana has already demonstrated its capabilities in the smart contract and NFT arenas. The pricing of the alt has benefited greatly by increased acceptance and usage. However, as word of the latest network shutdown circulated, Solana’s price plummeted by double digits on September 15.
Notably, at the time of writing, Solana had been able to reduce the negative returns to just 4%. To be sure, the social media ecosystem has become rather turbulent, and deservedly so. Solana’s social volume burst to a new local high amid the obvious banter on digital platforms. The same may be observed in Santiment’s chart, which is given below.
Surprisingly, Solana was not the only network that was unavailable yesterday. Arbitrum, Ethereum’s L2 scaling solution, was also down. To re-gain their positive traction, these networks would undoubtedly have to prove themselves once more.
Institutions would have taken notice of these coincidental shutdowns, and it will be fascinating to watch if they give Solana an opportunity to pick itself up and recover from the setback.