- Institutional investors are divesting from Bitcoin and Ethereum to other altcoins, notably Solana.
- In a survey of 64 asset managers, approximately 15% held Solana, compared to 0% in the previous study conducted by CoinShares.
- Approximately 14% of those questioned also considered Solana to be the “digital asset with the most compelling growth outlook”.
- Regulation continues to be a major barrier to entry for institutional investors and asset managers.
The institutional wave entering the cryptosphere continues to gain momentum – with investors paying more attention to Solana (SOL) than ever. The introduction of a Bitcoin ETF to TradFi markets was the first major catalyst, and Ethereum is another mainstay of institutional portfolios. But Solana, the fifth-biggest project by market cap, has produced some eye-catching numbers of late.
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Optimism Surrounding Solana Increases; Ethereum Falls
An April report from analysts CoinShares unveiled that institutional investors are strongly considering Solana as a third “blue chip” crypto token. The report surveyed 64 asset managers, responsible for nearly US$600B (AUD $917B) AUM and showed that almost 15% of them hold SOL in their portfolios.
On its own, this figure isn’t particularly stunning, but when compared to a past survey, Solana’s growth is plain to see. Previously, not a single institutional investor surveyed held any SOL. Meanwhile, Bitcoin and Ethereum’s weighting has fallen by 4%, suggesting that institutions are divesting away from the two market mainstays to consider altcoins – specifically Solana.
Other noteworthy changes include the fall of XRP, which did not feature in any institutional portfolio compared to 5% last survey.
Meanwhile, data taken from the same report shows several other positives for the crypto industry over the past few months. The number of institutions investing in digital assets in general has grown to about 3%, the highest number since this survey began in 2021.
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Optimism around Solana’s growth prospects has also increased, with about 14% of respondents suggesting SOL had the “most compelling growth outlook” of all digital assets. Meanwhile, Bitcoin remained stagnant (about 40%) while Ethereum fell a handful of percentage points for this question.
The survey also revealed several barriers remain in place preventing institutional investors from adding crypto to their portfolios. Notably, regulation and politics were a significant risk factor that are keeping investors at arm’s length from the digital asset markets. This once again demonstrates what many in the industry have been calling for – greater clarity from governments.
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