Solana, the fifth-largest crypto by market cap, has recorded significant outflows, reaching its all-time high at $39 million according to a recent report. Notably, this comes against the backdrop of a global crypto market downtrend.
With this latest update, the question of a possible Solana (SOL) exchange-traded fund (ETF) hangs in the balance as this development may increase regulatory uncertainties surrounding the coin.
Solana Sees New Record Outflows
The massive Solana outflows have caught the attention of the cryptocurrency community. According to CoinShares, the $39 million negative flow is the most for SOL investment products ever recorded. This downtrend is linked to a precipitous drop in memecoin trade volumes, a market primarily dependent on SOL.
Moreover, other cryptocurrencies saw varying degrees of success while Solana struggled with record outflows. All things considered, last week witnessed little inflows of $30 million into investment products for digital assets. Nevertheless, this low number hides a large gap across various assets and areas.
The largest inflows, amounting to US$42 million, were seen in Bitcoin, while outflows from short-bitcoin ETFs totaled US$1 million for the second week in a row.
Although there was a rush of activity last week, Ethereum only had US$4.2 million in inflows; new providers saw US$104 million in inflows, while Grayscale saw US$118 million in withdrawals. Investment product weekly trading volumes dropped to US$7.6 billion, over 50% of the previous week’s volume, as recent macroeconomic data suggested the Federal Reserve would be less likely to lower interest rates by 50 basis points in September.
Amid this, the uncertainties surrounding a potential SOL ETF continue to grow. Recall that VanEck and 21Shares filed S-1 forms for spot Solana ETFs in June 2024. However, both firms’ applications were withdrawn from the Chicago Board Options Exchange website. Consequently, debates were raised across the crypto community, speculating about the possibility of a regulatory nod for an ETF.
Solana (SOL) Price Action Amid Outflows
Meanwhile, Solana has suffered significant losses over the last day. Fresh data from CoinMarketCap show that SOL traded at $141.05 at the time of writing, indicating a 2.03% decline. Moreover, its one-day trading volume surged by 30.18% to $1.9 billion.
Also, the majority of the coins on the Solana ecosystem were trading in the red zone at press time with coins like Helium (HNT), Dogwifhat (wif), and Render (RENDER) recording significant losses in the last 24 hours.
