Is Solana witnessing a slow start to 2024?

• Solana fund outflows were worth $5.3 million last week.
• Bitcoin took a large share of the inflows amid an imminent spot ETF approval.

The year 2024 started on a good note as digital asset investment inflows recorded $151 million in the first week. However, Solana [SOL] did not contribute much to the funds despite having an impressive year in 2023.

Instead, it recorded more outflows, the CoinShares report revealed.

According to AMBCrypto’s assessment of the weekly report, Solana outflows were worth $5.3 million. There were many reasons for the change in sentiment toward the altcoin. But the notable of them was Bitcoin [BTC] and the price of SOL.

Though the price of SOL has recovered above $100, the previous week was not a good one for it. Based on CoinMarketCap’s data, the SOL price went below $90 in the first week of January. This was one of the reasons why its seven-day performance remained a 10.12% decline.

In Bitcoin’s case, there has been a lot of optimism around the coin. As a result, inflows related to it were worth $113 million out of the total $151 million.

Source: CoinShares

Furthermore, AMBCrypto discovered that the anticipation around the spot ETF approval in the U.S. was the major driver of the flow. So, it was not surprising that CoinShares’ Head of Research noted that:

“Despite the spot-based ETF not being launched yet in the US, 55% of the inflows were from US exchanges, with Germany and Switzerland seeing 21% and 17% respectively.”

Also, reports from several sources showed that the approval was almost done. This was also corroborated by Gary Gensler’s post on X on the 8th of January.

In the post, the SEC chair encouraged investors to be careful of crypto assets. Comments from under the post indicated speculation that the crypto-averse regulator had agreed to give the applicants the green light.

Before now, there was speculation that the event would be a “sell the news” one. However, details from the CoinShares report revealed that many participants did not share that sentiment. The report noted:

“If many truly believed that the launch of the ETF in the US would be a “buy the rumor, sell the news” event, we surely would expect to see inflows into short-bitcoin ETPs, instead, outflows over the last 9 weeks have amounted to US$7m.”

Meanwhile, the sentiment around Solana has been changing from what it was last week. To arrive at this conclusion, AMBCrypto checked out the Weighted Sentiment, using Santiment’s on-chain data.

According to Santiment, SOL’s Weighted Sentiment was -0.334 on the 6th of January. However, at press time, the metric has climbed to the positive region.

Source: Santiment

This resurgence was confirmation that the positive commentary about the project has outweighed the negative ones over the last two days.

Realistic or not, here’s SOL’s market cap in ETH terms

Should the sentiment remain the same till the end of the week, then fund flows linked to Solana may increase.

However, the altcoin might need to fight it out with Ethereum [ETH]. Unlike Solana, Ethereum investment products saw inflows totaling $29 million.