Solana inflows dominate altcoin space as funding rout plagues sector
- Solana capital inflows reached $24 million in the week to October 6, the highest level in more than a year, CoinShares noted.
- The altcoin topped the sector behind Bitcoin, which attracted weekly inflows totaling almost $43 million.
- Solana's Year-to-Date (YTD) inflows stand at $55 million, defying a funding rout in the crypto space.
Solana has emerged as a standout performer in the altcoin market with a surge in weekly inflows at $24 million, making it the "altcoin of choice", according to a recent CoinShares report. Meanwhile, venture capital funding in the sector is down, a decline that could be challenging for the broader crypto market.
Solana inflows top altcoin influx
Solana saw capital inflows of almost $24 million in the week ending October 6, a level not seen since March 2022, CoinShares noted in a report published Monday.
Based on the report, the altcoin came only behind Bitcoin, which attracted most of the digital asset inflows, totaling $43 million in the past week. Investment in the overall digital assets space increased by $78 million in the week to October 6, the largest amount since July, while trading volumes for exchange-traded products rose 37%, the data showed.
Solana's Year-to-Date (YTD) inflows stand at an impressive $55 million, solidifying its position, second only to Bitcoin.
Solana boasts an Assets Under Management (AUM) of $118 million at a time when VC funding is dwindling. A PitchBook report cited by Bloomberg noted a 63% decline in year-on-year venture funding for crypto startups.
Investors’ interest in Solana seems to be holding up at the time of a fall in VC funding, which could continue to cut the institutional cash when the sectoral funding is almost at its lowest point since 2020.
Solana price outlook amid market weakness
While Solana's inflows paint a positive picture, the broader altcoin market is grappling with challenges. This comes amid an escalating Hamas-Israel conflict, which brings further uncertainty to the market.
Solana price is around the $22 mark on Tuesday, with a 24-hour trading volume of $350.4 million, based on CoinGecko figures. Solana has experienced a stagnant price in the last 24 hours and an 8% decrease over the past week.
In the decentralized finance (DeFi) front, Solana boasts a Total Value Locked (TVL) of $312.42 million, reflecting a minor 0.87% decline in the last 24 hours, as per defiLlama. Solana hosts 110 protocols and serves 84,923 active users, commanding 0.84% of the cumulative TVL.
Solana's surge in inflows makes it a compelling contender in the altcoin market. However, investors should approach the broader altcoin market with caution amid the current downtrend.
Author
Shraddha Sharma
FXStreet
With an educational background in Investment Banking and Finance, Shraddha has about four years of experience as a financial journalist, covering business, markets, and cryptocurrencies.
