Key takeaways

• Solana ETPs saw $24 million worth of inflows at the beginning of October, Solana’s highest figure since March 2022
• The report, published by CoinShares, reveals that Solana investment products have been the second most popular option for the digital asset market
• After a +12% move for SOL in the past two days, the CoinCodex price prediction algorithm has forecasted a further +96% gain by December 2023

New yearly high for Solana ETP volume reveals deeper market sentiment

CoinShares reported recently that Solana (SOL) investment products attracted $24 million worth of inflows for the first time since March 2022. The figure accounted for 30% of the total for the entire crypto market, trailing only Bitcoin (BTC) which amounted to 55% of the total.

The figures reference digital asset investment products that are offered by a variety of leading custodians, including CoinShares, Grayscale, and Bitwise. Solana being the second-most-demanded investment product in the digital asset market reveals bullish investor sentiment for SOL at the current market price.

Interestingly, Solana investment products attracted 134% more inflows compared to Ethereum (ETH), which is the second largest cryptocurrency by market cap. CoinShares stated that this reflects a “tepid appetite” for Ethereum ETFs, despite the launch of six futures-based products for ETH at the beginning of October.

Inflows to exchange traded products (ETPs) for digital assets, via CoinShares

“Solana is the altcoin of choice” despite new launch of Ethereum ETFs

CoinShares stated that Solana has been the preferred altcoin for investors in recent weeks. Solana products accounted for 30% of inflows into ETPs, which had seen their largest gross inflow since July.

Solana’s strong performance may indicate growing confidence in SOL following a major decline in asset value towards the end of 2022 and a series of positive developments for the project in recent weeks.

While demand for Ethereum ETFs in the wake of their launch is likely being held back by wider market conditions, demand for Solana being more than 2x higher during a key week for Ethereum indicates a strong preference for SOL at this moment in time.

SOL vs ETH price action since November 2022, via TradingView

Algorithm predicts +96% gain for SOL

The CoinCodex price prediction algorithm has forecasted a major surge for SOL over the coming months that would take it to a new yearly high before the end of 2023. SOL’s former yearly high was formed in early July at $32.42, and SOL has now been showing signs of strength in recent days which could indicate that further upside is to come.

SOL has climbed 18% in the past 9 days, taking it back to resistance at $24.74. The algorithm expects SOL to break out from this level in the coming days before jumping to $40 in the next three months. In total, the move would include a +96% gain before a retrace takes place.

3-month price prediction for SOL, via CoinCodex

Bottom line: Fresh bullish sentiment, new project developments, and price prediction model all point towards upside for SOL

Solana being responsible for the second most inflows to digital asset ETPs shows that investors are bullish on the asset despite the wider market conditions. The $24 million inflows were the highest that Solana has seen for 19 months.

The project is fresh off the back of several new developments which may have influenced investor sentiment positively, including a new partnership between Shopify and Solana Pay and Visa choosing Solana for its cross-border settlement system.

The price analysis model used in the CoinCodex algorithm indicates that significant upside could be on the horizon for SOL, with almost 2x gains being forecasted before the end of the year.

It seems as though there is a gulf between SOL’s current price and the project’s value proposition, which could be a key reason why investors have opted for Solana ETPs instead of Ethereum at this moment in time.