Institutional Interest in Bitcoin ETFs Expands Amid Market Weakness
The latest U.S. regulatory filings indicate a growing and diversified base of institutional buyers for Bitcoin exchange-traded funds (ETFs), even as crypto prices struggle to maintain upward momentum.
On Tuesday, Bitcoin (BTC) extended its downward trend, edging closer to multi-month lows. By early afternoon, BTC was trading at $93,600, marking a 2% decline over the past 24 hours and a 10% drop for the week.
The broader crypto market, as tracked by the CoinDesk 20 Index, was down 4% in the same period. Solana (SOL) bore the brunt of the downturn, plunging 16% as sentiment in the memecoin sector deteriorated further. The recent collapse of LIBRA, a controversial token associated with Argentine President Javier Milei, has intensified concerns over fraudulent activity in the space. SOL has now shed 35% over the past month, erasing all gains it accrued following Donald Trump’s election victory.
Bitcoin’s Long-Term Outlook: $500K Still in Play
Despite Bitcoin’s sluggish performance, Standard Chartered analyst Geoff Kendrick remains steadfast in his long-term forecast. Kendrick has previously projected that Bitcoin could reach $500,000 before the end of Donald Trump’s presidency.
In a research note on Tuesday, Kendrick pointed to the latest 13F filings, which revealed a shift in Bitcoin ETF ownership from retail investors to hedge funds, and now to banks and sovereign wealth funds. Goldman Sachs has increased its ETF holdings, and Abu Dhabi has made its first ETF purchase, signaling a deeper institutional commitment to Bitcoin.
“Looking ahead, we anticipate an influx of long-term institutional investors into Bitcoin,” Kendrick noted. “Abu Dhabi’s involvement may be just the beginning of greater sovereign participation.”
Solana Faces Further Pressure
The downturn in Solana-related assets has been particularly severe. Tokens tied to the Solana trading ecosystem, including decentralized exchange tokens Raydium (RAY) and Jupiter (JUP), recorded double-digit losses. Meanwhile, liquid staking platform Jito (JTO) fell by 7%, with all three tokens now down over 30% from their Friday highs.
Solana, which has positioned itself as a key hub for memecoin launches, is reeling from the LIBRA debacle. The token, introduced last Friday, surged to a $4 billion market cap after President Milei endorsed it on social media as a tool to support small and mid-sized businesses in Argentina. However, its value collapsed after insiders liquidated $100 million worth of holdings, prompting Milei to retract his endorsement. The scandal has left Milei facing fraud accusations and potential impeachment, while Meteora co-founder Ben Chow has resigned following allegations of his involvement in the LIBRA launch.
Alex Thorn, head of research at Galaxy, described the incident as “another troubling chapter in Solana’s memecoin saga.” He added that sentiment around memecoins had already begun to decline following the launch of the TRUMP token.
Uncertainty Over Upcoming SOL Token Unlock
Adding to market jitters, Solana is preparing for a major token unlock event that could significantly increase the circulating supply of SOL. While estimates vary, one hedge fund analyst has suggested that approximately 15.725 million SOL—worth around $2.5 billion at current prices—will be released over the next three months. A large portion of these tokens is expected to come from the FTX estate holdings.
“If an unlock of this magnitude takes place, it could impact SOL’s circulating supply and alter market dynamics,” analysts at Tokenomist cautioned in an X post. “Historically, major token unlocks have triggered heightened price volatility. However, the exact amount and release schedule remain unconfirmed by official sources.”
As investors navigate this turbulent period, the broader crypto market remains in flux, with long-term institutional interest in Bitcoin contrasting sharply against the growing challenges faced by Solana and its ecosystem.
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