Solana ETF inflow streak ends at 21 days with an outflow of $8.1M while Bitcoin and Ethereum funds recover

Source: Yellow Original Title: Solana ETF inflow streak ends at 21 days with an outflow of $8.1M as Bitcoin and Ethereum funds recover

Original Link: https://yellow.com/en/news/solana-etf-entry-spree-ends-at-21-days-with-81m-outflow-while-bitcoin-and-ethereum-funds-recover The Solana (ETF) spot exchange-traded funds recorded their first net outflow of $8.1 million on November 26, breaking a streak of 21 consecutive days of inflows that began when the products were launched in late October.

The outflow occurred despite the accumulated inflows reaching 613.22 million dollars and total net assets rising to 917.99 million dollars across six funds, according to data from SoSoValue.

The shift occurred when institutional capital rotated towards Ethereum and XRP products, with Ethereum ETFs capturing $60.82 million and XRP funds attracting $21.81 million on the same day. Bitcoin ETFs recorded modest inflows of $21.12 million, suggesting selective positioning by investors rather than a general risk aversion sentiment. The outflow in Solana was primarily driven by the TSOL fund from 21Shares, which recorded a redemption of $34.37 million, while Bitwise and Grayscale products continued to attract new capital.

The development comes as Franklin Templeton submitted its final regulatory Form 8-A to the (SEC) for a spot Solana ETF with a management fee of 0.19% and a fee waiver on the first $5 billion in assets until May 31, 2026.

The presentation positions Franklin Templeton to launch its SOEZ product on NYSE Arca as soon as November 27, which adds to a competitive landscape that has seen stronger-than-expected institutional demand since Bitwise debuted the first Solana ETF in the United States on October 28.

What happened

Solana ETFs recorded their first negative daily flow since their inception, with an outflow of $8.10 million representing a strong turnaround from the recent momentum, which had seen funds attracting between $8.26 million and $58 million per day during November. The 21-day streak of inflows had pushed total assets to $917.99 million, equivalent to approximately 1.09% of Solana's market capitalization.

The TSOL product from 21Shares accounted for most of the redemptions, with an outflow of $34.37 million that brought its accumulated net flows into negative territory at -$26.22 million. Nevertheless, the fund's price gained 3.92% on the day, demonstrating that the outflows did not prevent the underlying asset from appreciating, as Solana was trading near $141, up 3.8% in the session.

The Bitwise BSOL ETF led the inflows with $13.33 million, adding 93,170 SOL tokens and raising its cumulative inflows to $527.79 million, with net assets totaling $631.20 million. Grayscale's GSOL fund attracted $10.42 million and added 72,840 SOL, with net assets reaching $148.28 million. Fidelity's FSOL added $2.51 million on the day, bringing cumulative inflows to $29.89 million, while the VanEck and Canary products did not register any flows.

The broadest cryptocurrency ETF market showed divergent patterns. Ethereum spot ETFs recorded their fourth consecutive day of inflows, with $60.82 million entering the funds, marking a turnaround after weeks of outflows that began on November 11. Bitcoin ETFs attracted $21.12 million despite Fidelity's FBTC recording an outflow of $33.3 million, with BlackRock's IBIT capturing $42.8 million and leading the positive flows.

XRP ETFs continued their uninterrupted positive streak with $21.81 million in inflows, bringing the total inflows to $643 million since their launch on November 13. The products have not recorded a single day of outflows since their debut, reflecting sustained institutional interest following the regulatory clarity resulting from the conclusion of Ripple's legal battle with the SEC.

The presentation of Franklin Templeton's Solana ETF marks the asset manager's entry into the Solana market following the successful launch of its XRP ETF, which attracted $62.6 million on its first full day of trading. The firm filed Form 8-A on November 25, representing the final administrative step before trading can begin. The SOEZ ETF will track the CF Benchmarks Solana Index and will hold physical SOL tokens in custody, offering a passive investment vehicle with the lowest management fee in the industry.

Why it matters

The first launch of a Solana ETF tests the strength of institutional demand for the third largest cryptocurrency by market capitalization amid broader volatility. Solana fell 30% in the last month, trading between $125 and $143, while negative perpetual funding rates and falling trading volumes put pressure on the asset. A single-day outflow does not necessarily signal a trend change, but highlights that institutional appetite for exposure to Solana remains selective even as accumulated flows approach a significant milestone of $1 billion in assets.

The rotation towards Ethereum and XRP products suggests that investors are reallocating capital towards assets with clearer regulatory pathways and more established institutional adoption. The four-day streak of inflows into Ethereum, totaling more than 220 million dollars, followed weeks of intense outflows that saw 1.64 billion dollars leave funds between November 3 and November 24. The shift indicates renewed confidence in Ethereum's scaling roadmap and the upcoming network upgrades, including the Fusaka hard fork on December 3.

Franklin Templeton's aggressive commission strategy undercuts all competing Solana ETF offerings and reflects tactics used during Bitcoin ETF launches, where competition on fees drove rapid asset accumulation. The firm's commission waiver on the first $5 billion until May 2026 could accelerate early adoption and pressure existing issuers to reduce their own fee structures. With $1.66 trillion in total assets under management, Franklin Templeton brings institutional credibility that may attract allocators who have thus far remained on the sidelines.

The moment coincides with the SEC's guidance that allows for automatic effectiveness under Section 8(a) for filings submitted without delay clauses. This mechanism enables the launch of ETFs after a standard period of 20 days, unless the SEC intervenes, accelerating the approval process that had been stalled during the government shutdown in October. Bloomberg ETF analyst Eric Balchunas noted that issuers taking advantage of this route could bring products to market quickly, with multiple cryptocurrency ETFs expected to launch in December.

JP Morgan originally forecasted that Solana ETFs would attract between $3 billion and $6 billion in their first 6 to 12 months, but revised its projections to approximately $1.5 billion in the first year following the market drop in October. The funds have already surpassed 60% of the revised forecast in their first month, suggesting that institutional demand remains strong despite price volatility. The growth of the Solana ecosystem —including tokenization projects like xStocks, which bring U.S. stocks to the chain, and the expansion of DeFi activity— continues to attract interest from traditional finance.

Final Reflections

The first day of trading in the Solana ETF market represents a natural consolidation after three weeks of uninterrupted inflows, rather than a fundamental shift in institutional sentiment. The redemption of $8.10 million is modest compared to the $613 million in accumulated flows and may reflect short-term profit-taking or rebalancing after SOL's 30% monthly decline. More significant is the pattern of selective capital allocation among cryptocurrency ETFs, with Ethereum and XRP products capturing the majority of the new investment while flows into Bitcoin remain lukewarm.

The imminent entry of Franklin Templeton adds competitive pressure that could benefit investors through lower fees and a greater variety of products. The firm's success with its XRP ETF, which attracted nearly $70 million in its first two days of trading, demonstrates that established asset managers can quickly capture market share in the altcoin ETF space. If Franklin Templeton's Solana product replicates this performance, total assets in Solana ETFs could exceed $1 billion by early December.

The divergence between the flows into Solana ETFs and the behavior of the underlying token price highlights that institutional products do not guarantee immediate price appreciation. SOL has traded in a consolidation range between 125 and 145 dollars despite constant inflows into ETFs, suggesting that the demand from retail traders and on-chain activity remain the main driver of short-term price action. Analysts have identified a key resistance at 145 dollars, with a potential breakout that could target the 155–175 dollar zone if overall market conditions improve.

The sustainability of demand for Solana ETFs will depend on several factors: the network's ability to maintain high performance without interruptions, the continuous growth of DeFi applications and real-world asset tokenization, regulatory developments affecting proof-of-stake networks, and competition from other layer 1 blockchains. Recent concerns about network congestion following the Upbit security incident at the end of November may have contributed to selective institutional caution, although the impact appears limited given that only one fund recorded significant outflows.