As investors show a healthy interest in the fifth largest cryptocurrency, funds related to Solana (SOL) witnessed serious demand last week. According to the latest report by cryptocurrency management firm CoinShares, Solana-based crypto products saw over $4 million in inflows last week.
Crypto Withdrawals and Entries
This situation marks a sharp turnaround from the previous week’s net outflow of $300,000. The increase in inflows occurred despite heavy outflows of $423 million and $38 million for tokens like Bitcoin (BTC) and Ethereum (ETH), respectively.
Interestingly, using CoinMarketCap data, it was noted that the demand for SOL-linked funds increased despite the cryptocurrency experiencing a 16% loss in value over the week. At the time of writing, SOL’s price had dropped over 10% in just 24 hours.
Solana’s Troubled Process
While it’s difficult to pinpoint the exact catalyst driving investors towards Solana products, the possibility of reduced network congestion is a plausible reason. Solana developers are releasing updates after launch to alleviate network failures and congestion, issues that significantly contribute to the surrounding FUD (fear, uncertainty, and doubt) about the cryptocurrency. The latest release, currently being verified in a test environment, is v1.18.12. The Solana community hopes these improvements will resolve ongoing issues in the blockchain, which has been pushed to its limits due to an increase in meme token transactions.
As Bitcoin’s price fell below $60,000, the downward trend in SOL charts continued, and the altcoin dropped 10% within 24 hours. The recent decline appears to be part of broader market downturns stemming from the poor performance of newly listed spot crypto ETFs in Hong Kong. Despite the price drop, interest in Solana is rising, and fund inflows are increasing. Developers are releasing updates to resolve network issues, but SOL prices are still affected by the overall market downturn.
