Crypto Market Sees $360M Outflows Amid Solana ETF Surge
Market Dynamics: Crypto Outflows and Solana ETF Growth
The cryptocurrency sector faced $360 million in outflows last week, attributed to investor reactions to Federal Reserve Chair Jerome Powell’s cautious stance on future rate cuts. Despite a recent rate reduction, Powell’s indication that another cut in December is not guaranteed, coupled with a lack of economic data due to the government shutdown, has led to market uncertainty, according to a CoinShares report.
The US market bore the brunt of the selling pressure, witnessing $439 million in outflows. This was partially counteracted by modest inflows from Germany and Switzerland. Bitcoin ETFs experienced the most significant decline with $946 million in redemptions.
Solana and Ethereum Inflows
Contrary to the general trend, Solana attracted $421 million in inflows, marking its second-largest influx on record, fueled by interest in newly launched US exchange-traded funds (ETFs), bringing its year-to-date inflows to $3.3 billion. Ethereum also saw positive movement with $57.6 million in inflows, although investor sentiment remained mixed.
The recent outflows follow a period of $921 million in inflows the previous week, spurred by lower-than-expected Consumer Price Index (CPI) data.
Launch of Solana Staking ETF
Bitwise’s Solana Staking ETF (BSOL) launched with $222.8 million in seed assets, indicating strong institutional demand for Solana staking products. BSOL provides investors direct exposure to Solana (SOL) with an estimated 7% annual yield from onchain staking rewards. By the end of the week, Solana ETFs recorded a fourth consecutive day of inflows, totaling $44.48 million.
Vincent Liu, chief investment officer at Kronos Research, highlighted the growing interest in staking yields and ongoing capital rotation, as traders capitalize on Bitcoin and Ether rallies. Despite the inflows, SOL’s price was $166, reflecting a decline of over 9% in the past 24 hours and approximately 26% over the past 30 days, based on CoinGecko data.