Last week, a record $39 million was withdrawn from Solana (SOL) investment products. The withdrawal occurred during macroeconomic volatility in the cryptocurrency market. This situation further increases the uncertainty surrounding the spot Solana ETF applications made by VanEck and 21Shares.
Record Withdrawals from Solana Investment Products
The massive fund outflow from Solana investment products has raised concerns in the cryptocurrency world. According to CoinShares data, the $39 million negative flow is the highest ever recorded for Solana investment products. This outflow is largely attributed to the sharp decline in trading volumes of Solana-based memecoins.
Meanwhile, as Solana grapples with this record outflow, other cryptocurrencies are showing different performances. Overall, there was a modest $30 million inflow into cryptocurrency investment products last week. This small inflow conceals significant differences between various cryptocurrencies and regions.
Bitcoin (BTC) attracted the most funds with a $42 million inflow, indicating continued investor confidence in spot Bitcoin ETFs and BTC‘s price. However, short-term Bitcoin ETPs saw outflows for the second consecutive week, totaling $1 million. This suggests that investors are avoiding betting on BTC’s performance in the current market environment.
Meanwhile, altcoin king Ethereum (ETH) recorded a $4.2 million inflow. However, this figure conceals intense activity among providers. While new entrants to the spot Ethereum ETF space saw a $104 million inflow, Grayscale’s ETH products experienced a $118 million outflow.
Uncertainty Grows for Spot Solana ETF Approval
As record outflows from Solana continue, uncertainty about the future of spot ETFs is also increasing. Recently, the spot Solana ETF applications by VanEck and 21Shares were removed from the Chicago Board Options Exchange (Cboe) website. This has raised concerns about the regulatory approval process and the future of these investment products.
The development has led to speculation about the U.S. Securities and Exchange Commission‘s (SEC) stance on the products. The SEC had shown a clearer stance on spot Ethereum ETFs last June but has not shown the same for Solana’s spot ETF applications.
The lack of necessary notifications from the SEC has sparked debates on whether the applications were withdrawn or rejected. Van Buren Capital’s General Counsel Scott Johnsson suggested that SEC Chairman Gary Gensler might have invalidated these applications because he does not consider SOL a commodity.
Finally, ETF Store President Nate Geraci confirmed that the ETF applications were removed and expressed doubts about the approval of spot Solana ETFs in the current regulatory environment. With these developments, interest in Solana investment products is waning while uncertainty is growing.
VanEck’s Head of Digital Asset Research Matthew Sigel criticized U.S. regulators for lagging behind countries like Brazil. Sigel suggested that the U.S. should implement a regulatory “soft fork” for the spot Solana ETF approval process.
