Cardano, Solana, and XRP Attract Institutional Investments

  • The trio of XRP, Cardano (ADA) and Solana (SOL) saw uptick in investor accumulation in the past week.
  • This growth comes despite the tagging of Cardano and Solana as investment contracts.

A recently published CoinShares report shows that Cardano (ADA), Solana (SOL) and XRP have been institutional investors best pals in the last couple of days. Unlike Bitcoin (BTC) and Ethereum (ETH) which have seen huge outflows amid significant corrections in the crypto ecosystem in the past week, XRP, ADA and SOL have seen a comparatively reasonable amount of inflows from institutional investors.  

The inflows for SOL, ADA and XRP summed up to $0.7 million, $0.4 million, and $0.1 million, respectively. At the time of this writing, Solana is trading at $20.18, up by 2 58%, ADA at $0.2556 up by 1.13% and XRP at $0.5095, having gained 2.34% per data from Marketcap.

CoinShares noted in its Digital Asset Fund Flows Weekly Report that investors are currently portraying a pessimistic stance which was further demonstrated in the level of outflows from eight out of the last nine weeks. The volume of outflows from crypto exchanges summed up to more than $450 million. 

The outflows from last week alone, which is the fifth week of consecutive outflows, was around $54 million with BTC representing about 85% of the entire outflows. 

“Bitcoin comprised 85% of the outflows, seeing US$45m last week. Short-bitcoin inflows the prior week proved to be short-lived, with outflows of US$3.8m last week, However, it remains the most loved investment product with month-to-date inflows at US$12m,” CoinShares highlighted. 

About $5 million worth of Ethereum was withdrawn while Binance Coin (BNB) and Polygon (MATIC) lost $0.3 million each. It looks like there has been a slight rebound with some of the tokens which experience huge outflows, especially Bitcoin which has gained 0.07% in the last 24 hours and is now trading at $27,166.84. 

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This outflow trend, however, does not negate the fact that altcoins adoption is soaring and growing amongst institutional investors 

Impact of Regulatory Scrutiny on Crypto Flows

Further underscoring the challenges faced by cryptocurrency exchanges in the United States is that a significant percentage of these outflows were traced back to the region. The strict regulatory environment in the U.S is obviously impacting negatively on the sentiment of investors in the region. 

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In June, the Securities and Exchange Commission (SEC) indicted both Binance and Coinbase. Binance was sued for 13 charges including breaking securities rules, misleading investors and regulators, mishandling customer funds, flouting basic Know-Your-Customer (KYC) rules and allowing Americans to improperly open accounts to trade on its platform.

Coinbase allegedly operated as an unregistered broker and exchange operator, violating regulatory requirements. The lawsuits impacted negatively on the broad crypto market as the price of tokens sank significantly. Most of the tokens listed as unregistered securities by the regulator saw huge declines in their prices.

However, based on the current CoinShares report, Cardano and Solana appear to be standing strong with renewed interest from institutional investors across the board.

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