By
Steve Muchoki
May 6th, 2024
The surge in interest can be attributed to Solana’s unique value proposition and its potential to offer attractive returns to investors.
Solana (SOL) is gaining traction among institutional investors looking to diversify their portfolios beyond Bitcoin (BTC) in anticipation of the upcoming bull run that is expected to accompany the Bitcoin halving event.
A recent survey led by James Butterfill, CoinShares head of research, indicates a significant rise in SOL allocations from wealth managers and hedge funds compared to other altcoins in recent months.
15% of Institutional Investors Invested in Solana (SOL)
The survey, which included 64 investors overseeing a total of $600 billion in assets under management (AUM), revealed a notable change in sentiment towards SOL.
According to CoinShares report, almost 15% of respondents have recently invested in SOL, a significant increase from the previous survey conducted in January, where none had exposure to the altcoin.
This surge in interest can be attributed to Solana’s unique value proposition and its potential to offer attractive returns to investors. The network’s appeal lies in its scalability, low transaction fees, and fast transaction speeds, making it an attractive option for institutional investors seeking efficient blockchain solutions.
Despite the growing interest in SOL, BTC remains the dominant force in the market. The report indicates that investor sentiment towards Bitcoin remains positive, with 41% of respondents recognizing its significant growth potential.
In comparison, Solana garnered less enthusiasm, with only 15% of respondents expressing optimism about its growth potential. However, this figure represents a notable increase from the January survey, where just over 10% of respondents viewed Solana favorably.
XRP Sees Decreased Institutional Interest
In terms of positive sentiment, Ethereum (Ether) ranked second after BTC, with 30% of respondents expressing confidence in its growth potential. However, the survey found that investor interest in Ether has significantly declined since the beginning of the year, with its score dropping from 35%.
The report also highlighted a decline in interest in altcoins like Ripple’s XRP. Unlike the January survey, which showed that a significant percentage of institutional investors held XRP, none of the 64 investors polled in the new survey currently own XRP.
Despite this decrease in direct holdings, investment products related to XRP saw significant allocations, with minor inflows of $1.3 million to XRP products for the week ending April 19.
The survey also revealed a significant change in investors’ asset allocations, with the percentage of digital assets in their portfolios increasing to 3% from 1.3% in January. CoinShares described this as the highest weighting since the survey began in 2021.
The report also attributed the rise to institutional investors’ increased ability to access Bitcoin through the US ETFs launched in January. Despite this increase in crypto allocation, equities (stocks) remained the most heavily weighted asset class, comprising over 55% of investors’ portfolios.