Solana Realizes 'Dramatic Increase' in Institutional Portfolios Says CoinShares 

Solana Realizes ‘Dramatic Increase’ in Institutional Portfolios Says CoinShares 

The European alternative asset manager CoinShares has, in a recent survey with wealth managers and hedge funds, reported a significant increase in allocations to Solana in 2024, unlike in the last year. 

CoinShares shows that institutional investors have broadened exposure to altcoins, with Solana benefiting with a lion’s share of the allocations from the hedge funds and wealth managers.

Institutional Investors Optimistic About Solana 

CoinShares research executive James Butterfill indicated that investors are optimistic about Solana, which will lead to increased allocation. The Wednesday, April 24 report captures views of 64 investors whose combined asset under management exceeds $600 billion. 

CoinShares indicated that nearly 15% of the respondents admitted to investing in SOL. CoinShares considered this to be a significant bump since the January survey revealed that none had invested in the altcoin. Solana is benefiting from investment cuts that institutions have undertaken in Bitcoin and Ethereum since January. 

Butterfill observed that Ripple Labs’ XRP suffered a significant decline, with none of the respondents holding the token. The researcher shows that institutions that invested in XRP have now distanced themselves from the token, unlike during the January survey. 

While surveyed institutions appear not to hold XRP, CoinShares acknowledge that the crypto has seen allocations to investment products. CoinShares pointed out that minor inflows estimated at $1.3 million were reported to XRP products in the third week of April. 

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Waning Appetite for ETH

Solana ranked third when respondents were asked about the most compelling growth outlook. Solana realized a sizable bump from 10% in January’s survey to slightly under 15% of respondents agreeing. 

Bitcoin retained the top spot in the just concluded survey, where 41% agreed it harbors the best growth potential. Ether retains the runner-up position, with 30% of the investors being bullish on its likely growth. However, Butterfill indicated a waning appetite for ETH as the score dropped from 35% in January. 

The survey illustrated that the crypto percentage in the portfolios rose from 1.3% in January to 3%. The rise is the highest weighting since CoinShares unveiled the study in 2021. 

Butterfill attributes the increased crypto weighting in portfolios to institutional investors who tapped the exposure to Bitcoin through the US exchange-traded funds (ETFs). Nonetheless, stocks emerged as the most weighted assets, with the class realizing 55% in portfolios. 

Butterfill explains that exposure to distributed ledger technology is the primary reason that investors consider purchasing digital assets. Despite the majority of the crypto witnessing price rally since January, the portion of investors that consider them good value rose from below 15% to over 20%. 

Butterfill explained that client demand is rising, prompting allocations. The researcher observed that the uptrend in demand is inevitable during positive price momentum. 

Crypto Poses Significant Barriers to Entry

CoinShares acknowledges that despite the overall data from the survey portraying a positive trend toward crypto, institutional investors and wealth managers decry the significant barriers to the asset class. 

The respondents consider that regulation is a stubborn barrier forcing them to enter the asset class. The resulting uncertainty prompts reluctance to undertake crypto investments. 

Butterfill considers corporate restrictions and uncertainty in interpreting regulatory guidelines to pose considerable barriers to entry. Politics and regulations pose the most significant risks to investors in crypto. The researcher noted that volatility and custody concerns have taken a back seat, leaving regulation as the primary barrier. 

Editorial credit: T. Schneider /

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