Solana ETFs see major withdrawals despite market rally
U.S. spot Solana exchange-traded funds recorded their largest single-day outflow on Wednesday, which I found interesting because it happened during a broader crypto market rally led by Bitcoin. The $32.19 million redemption marks the third—and honestly, the largest—outflow since these funds launched back in late October.
Looking at the breakdown, the entire outflow came from 21Shares’ TSOL product. That fund saw $41.79 million exit, though this was partially offset by modest inflows into other Solana ETFs. What’s notable here is that TSOL has been the main source of outflows, contributing to all three Solana ETF redemption events so far.
Competition enters the market
The timing of this outflow coincided with something else happening in the market. Franklin Templeton launched its own Solana ETF (SOEZ) on the same day. Their marketing team seemed pretty excited about it, tweeting that their “ticker name decider guy” was on “an absolute heater this quarter.”
Vitaliy Shtyrkin from B2BINPAY suggested this might be a position reset after three weeks of uninterrupted inflows and what he called a “sharp November drawdown.” I think that makes sense—sometimes investors rebalance when new options enter the market.
On-chain activity tells a different story
Despite the ETF weakness, Solana’s on-chain fundamentals present a more complex picture. Over $321 million has flowed onto the layer-1 network in the past month, with Ethereum being the major contributor—supplying over $240 million of that total.
Shtyrkin added some context about on-chain activity decreasing since the memecoin peak. Active addresses fell to multi-month lows, and positioning on derivatives is net-long but less aggressive than in October. He noted this development occurs amid a reduction in exchange supply and stable staking yields.
“This doesn’t signal exit,” he clarified, “more of a longer-term conviction.”
Market sentiment remains cautious
Solana is currently trading around $142.75, up slightly on the day. But users of prediction market Myriad are cautious about Solana’s short-term prospects. They’ve placed a 95% chance on it failing to break its all-time high before the end of the year.
The broader market outlook remains tense due to the Federal Reserve’s upcoming interest rate decision and economic data releases this month. Though Bitcoin’s recent selloff and recovery has relieved some near-term pressure, there’s still uncertainty.
Interestingly, several altcoins have shown strong bounce-back capacity. Coins like Fartcoin, ZCash, Sui, and PumpFun have posted double-digit rallies over the past week.
Still, sentiment remains in what many would call fear territory due to liquidation spikes noted since October. How this resolves will depend on macro factors, particularly the Fed’s forward guidance for 2026.
Myriad predictors have assigned an 80% chance that Bitcoin will hit $100,000 first before $80,000. That’s a pretty specific prediction, and it shows where market expectations are leaning right now.
What strikes me about this situation is the disconnect between ETF flows and on-chain activity. The ETF outflows suggest some institutional repositioning, while the on-chain data shows continued capital movement onto the network. Maybe this is just different segments of the market reacting to different signals.
