Solana Spot ETF, Suspiciously Strong in May...Funds Inflow Despite 30% Plunge in Open Interest

▲ Solana (SOL)

The Solana (SOL) spot ETF recorded no net outflows for a single day throughout May, demonstrating an unusual strength in institutional demand amidst capital flight from Bitcoin (BTC) and Ethereum (ETH) spot ETFs.

According to 24/7 Wall St. on May 31 (local time), the U.S. Solana spot ETF attracted funds throughout May 2024 without any net outflow days. Net inflows continued for 11 consecutive trading days in early May, pushing cumulative inflows past $1.06 billion, and by May 29, total cumulative inflows reached $1.13 billion. May's monthly inflow amounted to $115.34 million, marking the largest monthly volume this year.

Among individual products, the Bitwise Solana Staking ETF led the flow on several trading days. This product attracted $20.77 million on May 6 alone. The Fidelity Solana Fund and VanEck's VSOL also contributed to steady inflows throughout the month, though the intensity of inflows somewhat weakened towards the end of the month.

Solana spot ETF's May fund flows showed a distinct difference from other major cryptocurrency spot ETFs. During the same period, Ethereum spot ETFs saw over $100 million in outflows on a single day, and Bitcoin spot ETFs recorded approximately $1 billion in net outflows. 24/7 Wall St. assessed that Solana products did more than just hold their ground; they expanded their lead in the institutional fund competition.

Improved on-chain metrics also underpin institutional demand. In May, Solana's decentralized exchange (DEX) trading volume surpassed Ethereum's $31.59 billion, reaching $36.87 billion. Solana processed 32.6% of global stablecoin transfers, ahead of Ethereum's 27.8%, and expanded its use in PYUSD payments and enterprise integrations. Solana's stablecoin supply was stated to be approximately $13 billion, its active on-chain lending market share at 10%, and its total ecosystem app revenue at approximately $4 billion.

The Alpenglow upgrade was cited as a technical catalyst. This upgrade went live on the community validator test cluster on May 11 and aims for mainnet deployment in Q3 2026. Alpenglow targets reducing transaction finality time from approximately 12.8 seconds to about 150 milliseconds and received 98.27% approval in a validator vote last September. 24/7 Wall St. stated that since Solana only rose by 0.9% on the day the test was announced, the market may not have fully priced in the upgrade's effects yet.

However, risk factors remain. In May, Solana's open interest decreased by 30% from $2.75 billion to $1.9 billion, indicating that leveraged investors reduced their exposure. Pump.fun sent over 4.2 million SOL, approximately $738 million, to exchanges throughout May, and this volume acted as selling pressure on Solana. 24/7 Wall St. reported that if Alpenglow is implemented on the mainnet without issues and selling pressure eases, Solana has room to break past the $90 resistance level, but if upgrade delays or technical problems occur, the same structure could turn into price pressure.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*