Crypto Funds See $812M in Outflows with Solana Seeing Positive

Bitcoin and Ether ETPs saw $719M and $409M in outflows last week.
Solana ETPs recorded $291M in inflows amid market downturn.
Total crypto ETP assets fell to $221B from $241B, marking a decline.
Crypto ETPs still show $4B in monthly inflows despite recent setbacks.

Crypto exchange-traded products (ETPs) saw $812 million in outflows last week, ending a two-week streak of inflows. This decline in assets under management (AUM) has raised concerns, especially as Bitcoin and Ether ETPs experienced significant losses. However, Solana (SOL) stood apart, recording a major influx of $291 million in anticipation of upcoming exchange-traded fund (ETF) launches in the US.

Crypto ETPs Face a Setback

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Crypto exchange-traded products (ETPs) experienced a noticeable dip in the week leading up to Friday, with outflows totaling $812 million. This marks the end of a two-week streak where the market had seen positive inflows. As a result, the total assets under management (AUM) for crypto ETPs fell to $221 billion, down from a record $241 billion the previous week.

According to CoinShares, the decline was likely driven by a shift in investor sentiment. James Butterfill, head of research at CoinShares, noted that the recent pullback in US interest rate cut expectations had a notable impact. The changes in the broader macroeconomic landscape have dampened investor confidence, contributing to the outflows from Bitcoin and Ether ETPs.

Bitcoin and Ether Suffer Large Outflows

Bitcoin and Ether ETPs bore the brunt of the outflows during the past week. Bitcoin’s ETPs recorded outflows of $719 million, while Ether saw $409 million in withdrawals. This aligns with a decline in the price of Bitcoin, which dropped 3.4% from $112,000 on September 22 to a low of $109,000 during the week. Ether also mirrored this downturn, facing similar struggles in its ETP investments.

The drop in prices for these leading cryptocurrencies affected overall investor confidence, prompting a reassessment of their near-term prospects. As a result, funds tied to Bitcoin and Ether were less attractive to investors, leading to the large outflows observed.

Solana Outperforms Amidst the Downturn

While the broader crypto ETP market faced a decline, Solana’s (SOL) ETPs stood out by drawing in substantial inflows. Solana saw $291 million in inflows during the same period, despite the overall negative trend in crypto funds. Butterfill attributed this increase to growing anticipation surrounding potential US ETF launches that could benefit Solana’s market position.

The surge in Solana’s inflows comes as many investors show interest in projects outside of Bitcoin and Ether. Solana has positioned itself as a promising alternative, and the upcoming ETF launches are expected to further drive interest. With these developments in mind, Solana’s strong performance highlights the diversified interests of crypto investors looking for alternatives to the top two cryptocurrencies.

Crypto ETPs Still Maintain Positive Cumulative Inflows

Despite the recent outflows, crypto ETPs continue to show positive cumulative inflows. For the month of September, inflows have reached $4 billion, indicating that the broader market remains resilient. Additionally, year-to-date inflows have totaled $39.6 million, underscoring that investor interest in crypto ETPs persists even amidst short-term fluctuations.

According to CoinShares’ Butterfill, these positive inflows suggest that the crypto market could be poised to maintain momentum throughout the rest of the year. If the market continues to recover, the total inflows could match last year’s record of $48.6 billion. While the recent dip in ETP values has raised concerns, the ongoing inflows point to underlying strength in the market.

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