Solana ETF defies the trend and attracts funds: SOL has fallen over 30% this year, but institutional funds continue to invest

On March 10, it was reported that amid increased volatility in the crypto market and pressure on risk assets, Solana’s price has fallen more than 31% so far this year. However, in stark contrast to the price trend, Solana-related spot ETF products continue to attract significant capital inflows, prompting widespread market discussion about the source of these funds.

Bloomberg senior ETF analyst Eric Balchunas noted that since the launch of the Solana spot ETF in July 2025, it has attracted approximately $1.5 billion in total funds, while during the same period, Solana’s price has dropped about 57%. In terms of market capitalization, this scale of investment is comparable to the early-stage inflows of around $54 billion into Bitcoin ETFs, even surpassing the growth rate of Bitcoin ETFs at that time.

Balchunas stated that it is extremely rare in traditional financial markets for ETFs to maintain such large-scale capital inflows amid continuous price declines. Typically, if an ETF experiences a decline of over 50% within the first six months after issuance, most products struggle to sustain long-term investor interest.

However, recent fund flows have shown a brief change. Data indicates that over the past three trading days, Solana ETFs experienced approximately $16 million in outflows, marking the longest period of capital withdrawal since their launch. Nonetheless, the overall accumulated inflow remains close to $960 million.

Market analysts believe that institutional funds may be the primary driving force. Bloomberg analyst James Seyffart said that several institutional investors have disclosed their holdings through regulatory filings, including Electric Capital, Multicoin Capital, and various traditional financial institutions. Data shows that by the end of 2025, about 50% of ETF holder information had been disclosed via 13F filings, which is relatively high for newly launched ETF products.

Seyffart further pointed out that the capital inflow into Solana ETFs is unlikely to be mainly driven by basis arbitrage trading, as the spot-futures spread for Solana has remained low since 2026. He believes most of the funds are more likely driven by long-term bullish outlooks on Solana.

Meanwhile, Jeff Dorman, Chief Investment Officer at Arca, offered a different perspective. He suggested that some of the capital inflow might come from existing Solana holders converting their assets into ETF shares through “physical swaps.” Seyffart acknowledged that early funds may include such operations but emphasized that genuine new buying interest still exists.

Despite short-term market sentiment fluctuations, Solana’s price has recently rebounded somewhat, with the latest quote around $86. Whether future Solana ETF capital flows will turn back into net inflows could serve as an important signal of institutional confidence in Solana’s long-term prospects.