Solana sees ‘dramatic increase’ in institutional portfolios: CoinShares

As an observer with a background in finance and experience in analyzing market trends, I find the recent developments in institutional investment in altcoins, specifically Solana (SOL), quite intriguing. According to CoinShares’ report, there has been a noticeable increase in allocations from wealth managers and hedge funds towards SOL. This trend is reflected in the findings of their investor survey, which showed a significant jump in the number of investors holding SOL.

According to CoinShares, institutional investors are expanding their holdings in altcoins such as Solana (SOL). There’s been a significant surge in the allocation of this digital asset by wealth managers and hedge funds.

I’ve observed that the head of research at an asset management firm, James Butterfill, expressed optimism among investors regarding Solana in a report published on April 24. The report was based on a survey conducted among 64 investors collectively managing $600 billion in assets.

Around 15% of the investors who participated in the recent survey disclosed that they had put their money into Solana (SOL), marking a substantial increase compared to CoinShares’ January survey results, where no investor reported having invested in this particular altcoin.

I observed that, according to Butterfill’s findings, XRP (XRP) experienced a considerable drop in ownership among survey respondents, as none of them reported holding it during the recent survey contrasting the January one.

Although no institutions reported holding XRP in the survey, there were still investments made in XRP-related products. According to CoinShares’ recent report, these products experienced slight inflows of approximately $1.3 million during the week ending April 19.

During this period, Solana held the third position in terms of the most promising growth prospects based on the opinions of nearly 15% of the surveyed population – an improvement from the approximately 10% recorded in the same poll conducted in January.

Among the cryptocurrencies surveyed, Bitcoin (BTC) emerged as the preferred choice for 41% of investors due to its promising growth prospects.

I observed that Ether (ETH) came in second place among the assets with approximately 30% of the investors expressing optimism about its growth. However, according to Butterfill’s assessment, there has been a decline in investor enthusiasm since January, as evidenced by ETH’s score dropping from around 35%.

As a researcher conducting the survey, I discovered an intriguing trend: the proportion of cryptocurrency in investors’ portfolios increased significantly from 1.3% in January to reaching a peak of 3%. This marks the highest percentage allocation to digital assets since we initiated this survey in 2021.

It’s not surprising that institutional investors, among the biggest donors, took advantage of the new opportunity to invest in Bitcoin through US ETFs. (Butterfill’s writing)

Equities — stocks — were still the most weighted asset class at over 55%.

Investors’ primary motivation for purchasing digital assets was their familiarity with distributed ledger technology. Although the majority of cryptocurrencies experienced price increases since January, the proportion of investors considering them a good investment value grew significantly, climbing from below 15% to over 20%.

“Butterfill noted that the increase in client demand is common when there’s a positive trend in prices.”

Crypto still has “significant barriers to entry”

As an observer, I’ve noticed a generally upward trend in the data regarding cryptocurrencies. However, when it comes to wealth managers and institutional investors specifically, they’ve expressed that there are considerable obstacles preventing them from entering this asset class.

Among those who hadn’t invested in cryptocurrencies, Butterfill pointed out that they cited “persistently strict regulations” as a major deterrent.

He acknowledged that this situation could be a result of corporate limitations and the specific ways regulatory rules are understood.

For those who invested in cryptocurrencies, regulatory issues and political developments emerged as the primary concerns based on recent surveys, surpassing previous results recorded in January.

Butterfull said it was encouraging that volatility and custody concerns “continue to diminish.”

2024-04-26 06:53

Crypto still has “significant barriers to entry”

Read More