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Solana (SOL) ETFs Continue Attracting Institutional Money Despite 57% Price Drop

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Solana (SOL) Price

Key Takeaways

  • SOL has declined 57% since US-based Solana ETFs debuted in July, currently trading around $88
  • Despite price weakness, Solana ETFs have attracted $1.5 billion in net inflows with minimal redemptions
  • Institutional investors account for 50% of total ETF capital inflows
  • February 2026 saw Solana process a record-breaking $650 billion in stablecoin transactions
  • The network now ranks second only to Ethereum in USDC supply across all blockchains

While Solana’s token price has experienced significant pressure since its exchange-traded fund launch in the US, underlying network metrics and capital flows paint a different picture.

Solana (SOL) Price
Solana (SOL) Price

The SOL token currently hovers around $88, representing a 57% decline from the July ETF launch price. The token has also retreated 70% from its January 2025 peak of $293, which occurred during a speculative memecoin trading frenzy.

Yet despite this substantial price deterioration, Solana-focused ETFs have accumulated $1.5 billion in net capital and retained nearly all of it, according to Bloomberg’s ETF specialist Eric Balchunas.

In a Thursday analysis, Balchunas highlighted that institutional investors represent 50% of total inflows, characterizing this as a “serious investor base.”

He emphasized that ETF products launching during such severe market downturns typically struggle to attract any capital whatsoever, and most funds would collapse if their underlying asset lost 57% of its value within the first six months of trading.

When normalized for relative market capitalization, Solana ETFs have effectively pulled in the equivalent of $54 billion in Bitcoin-adjusted terms—approximately double the comparative flow Bitcoin ETFs experienced at the same stage post-launch.

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On Thursday, Solana ETFs experienced their first net redemption day in more than a month, with $6 million exiting the six available products. This followed a $19 million net inflow recorded Wednesday, based on CoinGlass tracking data.

Network Processes Unprecedented Stablecoin Activity

Beyond price movements, Solana’s blockchain infrastructure achieved a milestone $650 billion in stablecoin transaction volume throughout February 2026, as detailed in a Grayscale Investments research report.

Source: Grayscale

This represents the highest monthly stablecoin transaction volume ever documented on any blockchain network, accomplished within just 28 days. The figure more than doubled the previous record established merely four months prior in October 2025.

According to Grayscale’s analysis, this volume stemmed primarily from SOL-stablecoin trading activity and genuine payment transactions, rather than speculative memecoin speculation.

Solana’s minimal transaction costs have enabled economically viable small-value transfers, attracting developers creating payment infrastructure and micropayment applications that would be economically unfeasible on networks with higher fee structures.

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Climbing the Stablecoin Ecosystem Rankings

Solana currently maintains the fourth-largest total stablecoin supply among all blockchain networks. When examining USDC exclusively, it holds the second position, trailing only Ethereum.

Given USDC’s preference among institutional market participants, Solana’s runner-up status in this specific category represents a significant indicator for market observers.

Ethereum continues dominating tokenized real-world assets, processing $15.57 billion over the trailing 30-day period compared to Solana’s $2 billion, based on rwa.xyz analytics.

SOL has declined 2.7% in the past 24 hours and 11% over the past 30 days, according to CoinGecko data. The token last changed hands at approximately $88.40.

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Crypto World

Vitalik Buterin Backs Minimmit Over Casper FFG for Ethereum’s Consensus Layer

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Nexo Partners with Bakkt for US Crypto Exchange and Yield Programs

TLDR:

  • Minimmit achieves finality in one signing round, replacing Casper FFG’s two-round justification and finalization process. (truncate to fit — 105 chars)
  • The new gadget lowers fault tolerance from 33% to 17%, but raises the unilateral censorship threshold from 67% to 83%.
  • Buterin argues censorship poses a greater threat than finality reversion, as it lacks immediate, verifiable on-chain evidence.
  • Minimmit requires 83% of clients to share a bug before incorrect finalization occurs, giving developers a wider safety margin.

Minimmit has been put forward as a direct replacement for Casper FFG within Ethereum’s consensus layer. Ethereum co-founder Vitalik Buterin recently shared a detailed technical post comparing both finality gadgets.

Casper FFG has long served as a two-round finality mechanism on the network. The proposed system, by contrast, achieves finality in a single round of validator signatures.

The proposal is drawing attention as the Ethereum community continues to evaluate changes to its consensus architecture.

Why the New System Operates in a Single Round

Casper FFG asks each attester to sign a block on two separate occasions. The first signature “justifies” the block, and the second “finalizes” it.

Minimmit cuts this down to a single signing round. This makes the process more efficient for validators across the network.

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The change comes with a direct cost to fault tolerance, though. The new system’s threshold sits at 17%, compared to 33% under Casper FFG.

A smaller portion of malicious stake can therefore disrupt finality under the new model. Still, Buterin’s post makes the case that other properties of the system more than offset this drop.

In the post shared on X, Buterin described himself as a long-standing “security assumptions hawk” in Ethereum’s consensus research. He cited his past push for 49% fault tolerance under synchrony.

He also referenced his work on DAS for dishonest-majority-resistant data availability checks. Despite this record, he stated he is “even enthusiastic” about the proposed design.

The asynchronous network case also differs between the two systems. Under ideal 3SF, finality holds as long as an attacker controls less than 33% of stake.

The proposed gadget lowers that same protection to 17%. In both cases, any reversion of finality triggers massive slashing penalties against offending validators.

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Censorship Resistance and the Broader Security Picture

Buterin’s argument centers on identifying censorship as the more dangerous threat. Unlike finality reversion, censorship produces no immediate, publicly verifiable evidence against the attacker.

A reversion event, on the other hand, results in automatic, large-scale slashing. This asymmetry is a core reason behind his support for Minimmit’s design.

Both systems require an attacker to control over 50% of staked ETH to carry out censorship. The key distinction lies in what happens at higher thresholds.

In 3SF, an attacker above 67% can finalize the chain unilaterally, removing any coordination point for honest validators. The new system raises that threshold to 83%.

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Software bugs present another area where the proposed gadget holds an advantage. Under 3SF, a flaw shared by 67% of client software can accidentally finalize an incorrect chain state.

Minimmit raises that bar to 83%. This wider margin gives developers more time to identify and respond before errors become permanent.

Buterin also addressed the economic argument against finality reversion attacks. With 15 million ETH staked, reverting finality under 3SF would require slashing 5 million ETH, or roughly $10 billion.

He noted that the 17% baseline still represents an enormous deterrent on its own. From there, he argues the proposed system’s other properties make it the stronger overall consensus design for Ethereum.

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Ex-CFO Sentenced to Two Years after Diverting $35M to Crypto Venture

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Ex-CFO Sentenced to Two Years after Diverting $35M to Crypto Venture

Nevin Shetty was convicted of wire fraud related to secretly moving $35 million in funds from a Seattle startup to his own crypto platform in 2022 to use for DeFi investments.

A Seattle judge has sentenced the former chief financial officer of a local startup to two years in prison following his conviction for wire fraud related to a cryptocurrency business.

In a Thursday notice, the US Justice Department said Nevin Shetty would serve two years in prison after he “secretly moved approximately $35 million in company funds to a cryptocurrency platform he controlled as a side business.” He moved the funds to the HighTower Treasury platform in 2022 before a crypto market downturn, resulting in the disclosure of the transfer. 

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According to the DOJ, Shetty was able to transfer the funds without any executives or board members at the Seattle startup knowing about it, then using the money to invest in “high-yield DeFi lending protocols that promised to generate returns of 20% or more.” He initially earned $133,000 in the first month before the collapse of the Terra ecosystem contributed to a significant market downturn. 

“[T]he cryptocurrency investments that Shetty made with the stolen funds soon began declining and by May 13, 2022, the value of the investments was nearly zero,” said the DOJ. “After the $35 million was essentially gone, Shetty told two of his fellow executives what he had done. He was immediately fired.”

Shetty was indicted on charges of wire fraud in May 2023 and found guilty on four counts in November 2025 after a nine-day jury trial. He has been ordered to pay back the stolen funds and be on supervised release for three years after serving his two-year sentence.

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Related: Analysts reject Jane Street ‘10 a.m. dump’ claims, say Bitcoin isn’t easily manipulated

Former FTX CEO is still waiting on an appeal

Shetty’s 2022 case happened months before the collapse of cryptocurrency exchange FTX, which later resulted in the arrest and conviction of its former CEO, Sam “SBF” Bankman-Fried. SBF was sentenced to 25 years in prison in 2024 but has filed to appeal the ruling. As of Friday, the US Court of Appeals for the Second Circuit had not announced any decision since it heard arguments in November.