Solana has received over $2 billion in significant bets from institutional investors managing tens of billions of dollars in assets.
An increasing number of publicly listed companies are starting to hold SOL on their balance sheets. Currently, Solana's total market capitalization is $101.4 billion, and according to The Block Dashboard data, publicly listed companies hold a total of 3.44 million SOL. At an average price of $190 at the time of writing, this portion of SOL is worth about $650 million, with Upexi alone holding over 1.82 million SOL, valued at approximately $350 million.
However, the new capital layout is reshaping the current landscape. Currently, publicly listed companies hold only 0.69% of the circulating supply of SOL, while the recent $1.25 billion from Pantera Capital and the combined $1 billion commitment from Galaxy, Multicoin, and Jump will be 3.5 times the current holdings of publicly listed companies.
The arrival of big players signifies a silent capital competition.
Galaxy Digital, Multicoin Capital, and Jump Crypto officially announced on August 25 that they have launched a joint initiative, with these three crypto investment giants negotiating with potential supporters to raise about $1 billion specifically for accumulating Solana.
This is not a simple investment, but a carefully planned market action. The three giants have hired the seasoned Wall Street investment bank Cantor Fitzgerald LP as the lead bank, planning to create a digital asset financial company focused on Solana by acquiring an undisclosed publicly traded company.
Notably, the Solana Foundation has expressed support for this, and the transaction is expected to be completed in early September.
This action is not an isolated event but part of a long-term strategy. Multicoin and Jump have previously made significant investments in Solana ecosystem projects. Galaxy Trading had previously raised about $620 million specifically to purchase SOL at discounted prices from FTX's bankruptcy assets. Now, they are joining forces to increase their stakes.
A day later (August 26), Pantera, led by former Tiger Management executive Dan Morehead, also revealed its ambitious plan in a report by The Information—raising up to $1.25 billion to acquire a NASDAQ-listed company and transform it into an investment firm focused on Solana, named 'Solana Co.'
This is not an impromptu creation from Pantera. As early as April 2024, they began raising over $1 billion for a new fund. And now, the ambition behind this seemingly ordinary fund has finally surfaced—targeting the Solana ecosystem.
Most notably, Pantera is not only increasing its own stakes but is also partnering with ParaFi Capital to support Sharps Technology, a company dedicated to developing financial tools for Solana, which is raising over $400 million. This series of actions reveals Pantera's strong confidence in Solana's future.
But Pantera's strategy goes beyond that. It has been revealed that they have quietly invested about $300 million in digital asset financial (DAT) companies across 'various tokens and regions.' This approach not only generates returns but also increases net asset value, demonstrating the mature strategies of established investment institutions in the crypto space.
Why Solana? The strategic logic of institutional capital.
Smart investors are always good at finding opportunities in crises. It is not difficult to see that before the trend of concentrated investments in Bitcoin and Ethereum treasury companies became popular, Pantera and Galaxy both purchased heavily discounted SOL tokens from the bankrupt FTX. In simple terms, they have already made a significant profit from SOL.
The first batch of SOL tokens sold from FTX's bankruptcy assets (ranging between 25 million to 30 million) was sold at a price of $64 each, over 60% lower than the market price of SOL at that time, while the second batch of SOL was sold at a price between $95 to $110 each (15% to 26% below market price). There has been no public information disclosing how much Pantera and Galaxy profited from FTX's bankruptcy restructuring. However, the aggressive new strategy can easily be interpreted as a signal of making money.
The rise of the digital asset financial (DAT) company model provides these institutional investors with a new way to capture value. Through this model, they can not only hold SOL for potential appreciation but also earn stable income through various DeFi protocols, achieving multiple value increments for their assets.
The massive influx of institutional capital will undoubtedly form strong support for SOL's price. From historical experience, when institutional investors begin to systematically accumulate a certain crypto asset, it often drives that asset into a relatively stable upward channel.
The example of Ethereum has already proven this point. With the launch of ETFs and the entry of institutional investors, not only has ETH's price risen, but its volatility has also significantly decreased, and the market structure has matured. Currently, the ETH reserves held by 69 Ethereum treasury entities have reached 4.1 million, accounting for 3.39% of Ethereum's circulating supply, with a holding value of about $20 billion. Ethereum recently broke its highest record in nearly four years, partly due to the purchases made by these entities.
Now, Solana seems to be replicating this path, but its scale is still far behind BTC and ETH. With more institutional holders joining, the liquidity structure of SOL will undergo a qualitative change, potentially forming a more stable but also more concentrated holding pattern. Additionally, after the approval of ETH spot ETFs for over a year, analysts have indicated that SOL spot ETFs may be approved this year.
Traditional financial institutions are eyeing Solana not as an impulsive decision but based on its unparalleled technical advantages. In balancing the three major challenges of blockchain (decentralization, security, and scalability), Solana stands out with its astounding transaction processing capability and low Gas fees.
While Ethereum is still struggling with high transaction fees, Solana has already been able to process thousands of transactions per second while maintaining almost negligible costs. For institutional investors accustomed to the efficiency of traditional finance, this performance undoubtedly aligns more with their expectations.
More importantly, Solana's continuously growing decentralized applications (dApps), NFT, and DeFi protocol ecosystem provides it with rich application scenarios and growth potential. This overall prosperity of the ecosystem is one of the key factors attracting institutional investors.
For developers and projects on Solana, this is undoubtedly good news. More capital means more experimentation, innovation, and application scenarios, and the ecosystem is expected to enter a new phase of accelerated development.
In particular, the success of the digital asset financial company model may spawn more similar investment vehicles. This model not only provides convenient entry channels for institutional investors but also offers a viable path for the integration of traditional finance and the crypto world.
In the coming years, we may see more investment companies focused on specific blockchain ecosystems emerge, forming a whole new landscape for institutional investment.
The potential risks of power redistribution.
When Solana was first born, few could foresee that it would attract so much institutional capital attention in just a few years. From nearly disappearing due to the FTX collapse to now becoming a favored investment target for institutional giants, Solana's story itself is a testament to the incredible allure of the crypto world.
The current wave of institutional investment is likely just the beginning. As pioneers like Pantera and Galaxy set the benchmark, more traditional financial institutions may follow suit and incorporate Solana into their diversified portfolios.
However, the massive influx of institutional capital has also brought new concerns. When a small group of institutions holds a large amount of SOL, this will somewhat re-concentrate what was originally decentralized assets, potentially impacting the decentralization of the Solana network. The SOL treasury company DeFi Dev Corp. is actively hoarding tokens and has also stated on Twitter that it will vote in favor of the Alpenglow proposal, which will launch on Solana this week. Simply put, this proposal aims to make voting on Solana 'faster.' When ordinary users face these complex technical terms, will they follow suit, making Solana more aligned with the interests of large institutions?
Additionally, the risk of price manipulation may also increase. Once these large holders decide to adjust their positions, the market could face severe volatility.
