Solana has seen a ‘dramatic increase’ in institutional portfolios: CoinShares

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

“Investors are more bullish on Solana,” said James Butterfield, head of research at the asset manager, who has $600 billion in total assets under management in an April 24 report based on a survey of 64 investors.

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

Butterfill noted that XRP (XRP) “declined significantly” compared to the January survey, with none of the survey respondents currently holding it.

While institutions surveyed by this survey do not hold XRP, they see allocations to cryptocurrency investment products, with a CoinShares report showing $1.3 million flowed into XRP products in the week ending April 19.

Meanwhile, Solana ranked third with a “very favorable growth outlook” with just under 15% of respondents agreeing – up from more than 10% in the same survey in January.

Bitcoin (BTC), however, is at the top of the list with investors agreeing that it has 41% better growth potential.

Ether (ETH) came out on top with more than 30% of respondents highly positive on its growth. Butterfill said that “investor appetite has waned since January,” with ETH's performance down around 35 percent.

The percentage of cryptocurrencies 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 biggest contributors to this are allocations from institutional investors who ultimately gained exposure to Bitcoin through US ETFs,” Butterfill wrote.

Stocks – stocks – were still the most heavily weighted asset class at over 55%.

Exposure to distributed ledger technology is the main reason investors have bought digital assets, and since January, the percentage of cryptocurrencies that say they are “good value” has jumped from under 15 percent to 20 percent, even as prices have risen.

“As with positive price momentum, customer demand has also increased,” Butterfill added.

Crypto still has a “high barrier to entry.”

While the overall data is positive towards crypto, wealth managers and institutional investors in particular report that there have been “significant barriers to entry into the asset class”.

Among respondents who don't have crypto in their portfolios, “regulation is too rigid” as a reason for holding them back from crypto investments, Butterfill noted.

“Although this may be due to the way organizations interpret restrictions and regulatory guidelines,” he said.

Related: 12 Solana presale memecoins abandoned after a month

As for the investors who had crypto investments, regulations and politics were the main concerns of crypto, increasing since the results of January.

Butterfull said it was encouraging that flexibility and conservation issues “continue to decline”.

Magazine: Blockchain Investigators: M. Gox's Collapse Begat Chinaliss