Investors piled a record amount of money into altcoins last week and solana’s sol token was the biggest beneficiary, according to a CoinShares report on Tuesday.
A record $13.2 million flowed into solana-backed investment products in the week up to September 3, the data showed. Total assets under management in the token are now $44 million, up from just $15 million the previous week, marking an increase of over 190%.
A series of upcoming upgrades to the likes of the solana, cardano and polkadot blockchains, along with a resurgence in demand for non-fungible tokens (NFTs) over the past couple of months have driven investors into the tokens associated with these networks.
Altcoins now account for a record 35% of all crypto-related assets under management, according to the CoinShares report.
Investors are starting to consider solana for its potential to rival ethereum, as it has cheaper transaction costs and is faster. Solana handles around 60,000 transactions per second at $0.0015 per transaction, while the ethereum network handles around 17,000 at cost of $5.80 per transaction, James Butterfill, CoinShares chief investment strategist said.
“People are starting to look at what might be better than ethereum and I think that’s why solana’s been popular,” Butterfill said.
Sol rose by as much as 37% earlier on Tuesday to a new all-time high of $195.70. The coin has risen by over 350% in the last month, compared to an 84% gain in cardano’s ada, a 64% rise in polkadot’s dot and increases of just 24% in ether and 16% in bitcoin.
“[Sol] still has a long way to go before it could genuinely challenge ethereum. But I do think there is a bit of a trend for looking for alternative coins,” Butterfill continued.
There was a total of around $22 billion in assets under management backed by altcoins such as dot, litecoin, xrp, ada, bitcoin cash and ethereum, which was a 19% increase from the previous week, according to the report.
Meanwhile, bitcoin saw inflows totalling $59 million after eight weeks of outflows in the latest week, which could mark “a potential turnaround in sentiment amongst investors,” the report said.