Solana, the blockchain platform that offers fast, scalable, and low-cost transactions, has been one of the few bright spots in the crypto market this year. According to a report by CoinShares, a digital asset investment firm, Solana has seen 27 weeks of net inflows from institutional investors totaling $79 million.
This makes Solana the most-loved altcoin by institutions this year, surpassing other popular platforms like Ethereum, Cardano, and Polkadot.
Solana Continues to Attract Interest
In contrast, Ethereum has seen seven consecutive weeks of outflows, amounting to $114 million. Bitcoin, the largest cryptocurrency by market cap, has also experienced mixed results, with $20.4 million of inflows last week but $19 million of outflows from the U.S. market.
What makes Solana so appealing to institutional investors? James Butterfill, the head of research for CoinShares, said that Solana’s partnership with many financial institutions, such as Visa, gives it an edge over its competitors. He also said that Solana’s ability to offer ultrafast and cheap payments makes it attractive for users and developers.
Solana’s performance has also been impressive this year, both in terms of its network growth and its token price. According to DefiLlama, a website that tracks decentralized finance (DeFi) projects, Solana’s total value locked (TVL) reached a new high of $338.82 million this week, indicating a strong demand for its DeFi ecosystem.
Solana’s native token, SOL, has also surged by more than 2,000% since the start of the year, trading at around $24 at the time of writing. However, Solana is not without its challenges and risks. The platform suffered a major outage in September due to a denial-of-service attack that overloaded its network.
The incident raised questions about Solana’s security and decentralization, as well as its ability to handle high volumes of transactions. Solana also faces stiff competition from other blockchain platforms that are vying for the same market share and user base.
Despite these uncertainties, Solana seems to have captured the favor of institutional investors who are looking for alternatives to Bitcoin and Ethereum. Whether Solana can maintain its momentum and live up to its potential remains to be seen.