Solana sees ‘dramatic increase’ in institutional portfolios: CoinShares

Institutional investors appear to be “broadening their exposure to altcoins” including Solana ( SOL ), which has seen a “dramatic increase in allocations” from wealth managers and hedge funds, says CoinShares.

“Investors are more optimistic for Solana,” the asset manager’s head of research, James Butterfill, wrote in an April 24 report based on its survey of 64 investors with a combined $600 billion in assets under management.

Nearly 15% of surveyed investors said they had invested in SOL, a significant bump from CoinShares’ January survey which showed none of the respondents had any investment in the altcoin.

Crypto investments in January (black diamonds) compared to April (blue). Source: CoinShares

Butterfill noted XRP ( XRP ) had seen a “significant decline, with none of the survey respondents holding it now" compared to the January survey.

Despite the surveyed institutions not holding XRP in this survey, investment products for the cryptocurrency do see allocations, with CoinShares’ report showing minor inflows of $1.3 million to XRP products for the week ending April 19.

Meanwhile, Solana was third when ranked by the “most compelling growth outlook” with just under 15% of respondents agreeing — a bump up from over 10% from the same survey in January.

Bitcoin ( BTC ) however, remained in investors’ top spot with 41% agreeing it had the best growth potential.

Ether ( ETH ) was runner-up with just over 30% of respondents bullish on its growth. Butterfill noted that “investor appetite has waned since January” with ETH’s score dropping from around 35%.

Cryptocurrency ranked by growth outlook. Source: CoinShares

The survey also found the percentage of cryptocurrency  in investors’ portfolios rose to 3% compared to 1.3% in January which Butterfill said was “the highest weighting since the survey began in 2021.”

“Unsurprisingly, some of the largest contributors to this were allocation from institutional investors who finally had the ability to gain exposure to Bitcoin via the U.S. ETFs,” Butterfill wrote

Equities — stocks — were still the most weighted asset class at over 55%.

Institutions were second behind individual investors for being the most positioned in crypto. Source: CoinShares

Exposure to distributed ledger technology was the main reason investors bought digital assets and despite most cryptocurrencies rising in price since January the percentage that said they are “good value” jumped from under 15% to over 20%.

“Client demand has risen too, as is often the case during positive price momentum,” Butterfill added.

Crypto still has “significant barriers to entry”

While the overall data trended positive toward crypto, wealth managers and institutional investors, in particular, reported there were “significant barriers to entry to the asset class.”

Of the respondents that didn’t have crypto in their portfolio “regulation remains stubbornly high” as a reason preventing them from crypto investments, Butterfill noted.

“Although this maybe due to corporate restrictions and the way in which regulatory guidelines are interpreted,” he added.

Related: 12 Solana presale memecoins abandoned after just a month

As for investors who had crypto investments, regulations and politics were the top perceived risks to crypto, rising from the January results.

Investor beliefs on key risks to crypto. Source: CoinShares

Butterfull said it was encouraging that volatility and custody concerns “continue to diminish.”

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