Institutional investors have resumed investing in the smart contract platform Solana ($SOL) through cryptocurrency-focused investment products. Their wagers come weeks after the collapse of FTX and the price decline of SOL.
According to CoinShares’ most recent Digital Asset Fund Flows report, Solana-focused investment products received $200,000 in inflows last week, their second week of inflows after the collapse of FTX.
Sam Bankman-Fried, the chief executive officer of FTX, is a well-known $SOL advocate who has invested in several initiatives on the cryptocurrency ecosystem. As a result of FTX’s failure, investors’ faith in these ventures has been diminished due to his participation in them. $SOL is trading at $14 at the time of writing, after reaching a low of $11 last month.
According to CryptoGlobe, data from on-chain analytics company Santiment indicates that Solana’s fear, uncertainty, and doubt might lead to a price resurgence “unless traders calm down their practically unanimous wagers against $SOL’s price.”
At a time when there aren’t many believers in cryptocurrency, some have speculated that a short squeeze is imminent. A short squeeze causes a sudden, unanticipated spike in prices, which builds speed when short sellers liquidate their holdings. As sellers close their positions, the inflow of purchase orders contributes to the asset’s price increase.
Notably, former Goldman Sachs CEO Raoul Pal has stated why he feels now might be an excellent opportunity to invest in $SOL, the native token of the Solana blockchain, despite the pessimism surrounding the Solana ecosystem after the demise of FTX.
During a “Ask Me Anything” session aired on the YouTube channel “Real Vision Crypto,” Pal said the following regarding Solana, after stating that he loves Solana and its present condition, and adding that the cryptocurrency is “doing something extremely creative.”
Solana reminds me of Ethereum in early 2018 when the price had fallen by 97% and nobody noticed. And it was a darn wonderful chance.
In the last week, digital asset investment products had withdrawals of $7.5 million, according to a study by CoinShares. However, this number is deceiving since “the bulk of outflows were from short investment products.”
According to the data, long-only products received inflows of $3.3 million, while BTC saw inflows of $10.8 million. Ethereum ($ETH) investment products had $4 million in withdrawals, while Polygon ($MATIC) investment goods experienced $300,000 in inflows.