Solana's Rising Appeal: Institutional Investors Increase Allocations

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Solana has seen a significant uptick in adoption per a recent survey.
Bitcoin is generally the most embraced cryptocurrency among investors.

A recent report from CoinShares reveals a rising appeal on the Solana (SOL) blockchain amid increased allocation from institutional investors. The report highlighting the growing optimism surrounding Solana is based on a survey of 64 investors collectively managing assets worth $600 billion, according to James Butterfill, Head of Research at CoinShares.

Investors Turn to Solana

According to the details, nearly 15% of surveyed investors disclosed investments in SOL. This value indicates a noteworthy rise from previous surveys. A CoinShares survey conducted in January showed none of the respondents holding any investment in Solana.

Solana’s prominence was further emphasized as it ranked third in terms of the “most compelling growth outlook.”

“Investors have been broadening their exposure to altcoins, with Solana seeing a dramatic increase in allocations,” Butterfill noted.

The increasing interest in Solana coincides with recent technological advancements and the altcoin’s growing market presence. Per Crypto News Flash’s earlier announcement, Subsquid, a Web3 data lake and query engine, is set to partner with Solana-powered Neon EVM.

In the latest survey, XRP, the cryptocurrency associated with Ripple Labs Inc saw a contrasting picture to SOL. Butterfill noted a considerable decline in interest for XRP. None of the surveyed investors reported holding XRP, a stark contrast to previous surveys. Despite this, a CoinShares report shows inflows of $1.3 million recorded for the week ending April 19.

However, Bitcoin (BTC) retained its position as the favored cryptocurrency for growth among investors, with 41% expressing bullish sentiments, albeit a minimal decrease from previous surveys. Ethereum (ETH) followed closely as the runner-up, with just over 30% of respondents optimistic about its growth prospects.

The survey revealed an overall increase in the percentage of cryptocurrency held in investors’ portfolios, reaching 3% compared to 1.3% in January. Butterfill points out that this marks the highest weighting since the survey’s inception in 2021.

Some of the largest contributors to this growth were allocations from institutional investors who finally could gain exposure to Bitcoin following the approvals of spot Bitcoin Exchange-Traded Fund (ETF) in the US. Nonetheless, stocks remain the most weighted asset class, accounting for over 55%.

Barriers Against Crypto Adoption

While the report noted a positive trend toward crypto adoption among institutional players, substantial barriers to entry into the asset class persisted. Regulation emerged as a primary concern, particularly among respondents without crypto exposure.

Butterfill noted that regulatory constraints together with corporate restrictions have stopped many from entering the crypto market. He, however, hinted that volatility and custody continued to diminish. The percentage of investors who view digital assets as “good value” jumped from under 15% to over 20% between January and April, driven by increasing client demand and positive price momentum.

As of the latest Marketcap data, SOL is trading at $142.9, representing a slight decline of 0.3% within the past 24 hours. The trading volume also decreased by 24% to $3 billion, while market capitalization stood at $63 billion.