So far this month, institutional investors have placed bets totaling over $1.1 million on investment products offered by Solana ($SOL).
Despite what has been described as "broad negative sentiment" in the market, institutional investors have put more than one million dollars into cryptocurrency investment products that expose them to Solana ($SOL). This is even though crypto investment products have experienced outflows.
According to the most recent report (1) on Digital Asset Fund Flows from CoinShares, investment products focusing on Solana saw inflows of $700,000 last week. This brings the total amount of money invested in these products to $1.1 million for December, up from the $400,000 seen the week before.
According to the report produced by the company, cryptocurrency investment products experienced withdrawals totaling $30 million over the past week. This was due to the lingering uncertainties surrounding the failure of businesses connected to FTX and the ongoing hawkish rhetoric from the Federal Reserve.
Over the previous week, investment products focused on Bitcoin ($BTC) experienced outflows of $17.5 million, while those short, the flagship cryptocurrency, received inflows of $1.1 million.
According to the research, Solana competitor Ethereum ($ETH) saw its fifth straight week of withdrawals, which totaled $9.1 million.
Solana Seeing Lower Lows in 2022
The total funds managed by crypto investment products reached a new low of $22.3 billion.
The price of Solana was significantly impacted by the fall of FTX. Sam Bankman-Fried, the CEO of FTX, is a well-known promoter of $SOL and has invested in various enterprises that are part of the cryptocurrency ecosystem. He was detained earlier this week in the Bahamas.
Since he was involved in these enterprises, investors' faith in them has suffered as a direct result of the failure of FTX. After falling to an all-time low of $11 a month ago, $SOL is currently trading in the neighborhood of the $12 threshold.
The on-chain analytics firm Santiment's data implies that the uncertainty surrounding Solana could result in a price increase for the cryptocurrency. This might occur if short sellers decide to cover their positions, which would cause a short squeeze.
A short squeeze occurs when an asset's value suddenly and unexpectedly rises. The increase in buy orders might further push the asset price higher as short sellers liquidate their positions.
Troubles of Solana
Since its introduction in 2020, Solana has experienced a few significant network disruptions, three of which occurred this year alone. One or more faulty nodes, code errors in Solana, or a deluge of fake traffic from bots are to blame for the disruptions.
Solana's blockchain was offline for roughly 6 hours on the 30th and 1st of September. The operator of a Solana validator, Stakewiz.com, claimed (3) that a faulty node produced an irreparable split in the Solana network and called on other validators to help reach an agreement on the necessary data to rebuild the network.
Solana experienced an outage (4) lasting over 18 hours in September 2021. There have been multiple occurrences of this type of outage over the past 12 months. Early in May, NFT minting bots overloaded the Solana network, causing it to freeze for around seven hours before validators revived it. In June, a network outage lasted for around four hours.