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For the first time since July, Bitcoin (CRYPTO: BTC) fell below $100,000 on Tuesday as the crypto sell-off saw $1.7 billion in liquidations in 24 hours.
Ethereum (CRYPTO: ETH) is down nearly 5% over the past 24 hours, bottoming below $3,200 in Tuesday afterhours trading.
Meanwhile, Solana (CRYPTO: SOL) has slipped 20% over the past week.
The Nasdaq Composite turned volatile as investors sold shares of Palantir Technologies Inc. after its earnings, reflecting broader profit-taking in high-valuation growth sectors.
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ETF Flows Reveal Rotation Toward Solana
While retail traders reduced exposure, institutional money flowed in a different direction.
Bitwise Asset Management has launched the Bitwise Solana Staking ETF (NYSE:BSOL), pulling in $417 million in total inflows in one week.
“It’s the fastest-growing new ETF to launch this year — across all asset classes,” said Bitwise’s Chief Investment Officer Matt Hougan on Tuesday on CNBC.
“Investors were clearly hungry for Solana exposure in a simple staking spot ETF,” he added.
Hougan noted that BSOL stakes 100% of its underlying Solana holdings, offering yields of about 7%.
He said the fund’s early success underscores institutional appetite for staking-based returns and long-term exposure to blockchain infrastructure plays.
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Why Institutions Favor Solana
Hougan said Solana benefits from two major trends: the expansion of stablecoin payments and asset tokenization.
“If both markets grow, Solana stands to win a larger share,” he explained.
The network’s recent partnership with Western Union Co. to issue a stablecoin on Solana added to that narrative.
He compared the blockchain’s potential to the early Internet boom, calling it “one of the most user-friendly and scalable ecosystems,” while acknowledging that Ethereum remains the dominant platform.
Crypto Retail Sentiment Near Capitulation
Hougan described today’s market as “a tale of two markets.” Retail traders face leverage unwinds and liquidations, but institutional investors remain constructive.
“We have to get through this retail flush-out,” he said, predicting sentiment could bottom before a rebound into 2026 as professional investors accumulate at lower prices.
He added that Bitwise expects more spot crypto ETFs in coming months, including products tied to XRP (CRYPTO: XRP) and diversified crypto-index funds once regulators finalize approvals.
