Bitrabo Editorial
Digital asset investment products are facing a second week of withdrawals, yet Solana is showing a positive trend. Last week, cryptocurrency investment products experienced significant outflows totaling $726 million.
The losses were primarily from Bitcoin and Ethereum, both major cryptocurrencies, as their market prices showed weak performance. Meanwhile, investment products related to Solana have managed to stand out positively amid this market downturn.
Solana’s Appeal Among Investors
For the second week, Solana has seen positive inflows, indicating rising confidence from investors. According to CoinShares’ recent report on digital asset funds, Solana attracted $6.2 million in inflows last week, bringing its total for the year to $47 million.
Although these figures might seem small compared to the overall market, the timing enhances their significance. The cryptocurrency market has been dominated by bearish sentiments recently, causing institutional investors to withdraw funds at rates comparable to previous record levels in March.
Much of the negative market sentiment is linked to expectations regarding the U.S. Federal Reserve’s monetary policy. Many investors are predicting a 25 basis point interest rate cut following unexpectedly strong economic data from the prior week, leading to $721 million being withdrawn from U.S. digital asset products, with Canada experiencing $28 million in withdrawals.
Bitcoin dominated the outflows, with Bitcoin ETFs seeing daily withdrawals, adding up to a total of $643 million. Ethereum faced similar issues, particularly with its new Spot ETFs like the Grayscale Trust, which contributed to the total outflows of $98 million as investor enthusiasm cooled in light of overall market conditions.
Conversely, some digital assets recorded small inflows. Multi-asset products attracted $3.4 million, while XRP and Litecoin gained inflows of $1 million and $0.7 million, respectively. Additionally, investment products betting against Bitcoin’s price (short Bitcoin products) saw inflows of $3.9 million, highlighting the prevailing pessimism around Bitcoin.
Interestingly, European investment products ended the week with positive inflows, particularly in Germany and Switzerland, which reported inflows of $16.3 million and $3.2 million, respectively. Other countries like Australia and Brazil also benefited, with inflows of $0.9 million and $3.9 million respectively.