Crypto market stagnates despite growing institutional interest

 

Crypto market stagnates despite growing institutional interest

© Provided by City AM

It was an uneventful week for Bitcoin and the larger crypto market, with the leading cryptocurrency fluctuating between the $43,000 and $48,000 mark. According to data from CryptoCompare, Bitcoin’s price increased 1.39% over the last week, price movement which many would consider lacklustre for the world of crypto. 

Ethereum’s Ether – the second-largest cryptocurrency by market capitalisation – followed Bitcoin’s lead, rallying to a price of $3,650 toward the end of last week before falling back to its current trading price of around $3,100. Week-on-week, Ethereum is down 1.56 per cent. Despite the price decrease, the Ethereum network continues to burn tokens, with the last negative daily issuance occurring on September 9. 

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Over the last few months, both Bitcoin and Etheruem have experienced increasing interest from institutional investors. However, following its meteoric rise, Solana is the latest crypto asset to attract the eyes of institutional investors. 

Crypto ETP provider, 21Shares, released the first Solana ETP product in mid-August which was met with high demand, seeing $49.4m in net inflows during the week starting September 6 – more than any other asset in the same period.

In August, Bitcoin had net outflows of $62mn – the fourth straight month of net outflows for Bitcoin-based products. In the first week of September (starting August 30), however, this trend reversed with Bitcoin products recording inflows of $59mn, the highest amount of weekly inflows since the flash crash in May. © Provided by City AM

Despite increasing institutional interest, the Solana network suffered growing pains last week – experiencing a major network outage that lasted for more than 17 hours. The cause of the outage stemmed from “resource exhaustion” after a large increase in transaction load, which peaked at 400,000 TPS. 

Solana’s price was impacted by the network downtime, falling from approximately $170 to $142. At the time of writing, Solana was trading near $140. 

Two days prior to the Solana network outage, Blockchain advisory firm and investment partnership Moonrock Capital announced the purchase of two Solana NFTs from the Degenerate Ape Academy and SolPunk collection for 5,980 and 1,388 SOL, respectively, or $1.1m and $260,000 (at the time of purchase). Interestingly, Moonrock Capital aren’t the only firm seeking NFT exposure, as, toward the end of August, Visa purchased a CryptoPunk NFT on the Ethereum blockchain for $150,000. 

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