Solana Whales Sell But ETFs Absorb Supply, Stabilizing Price

Recent on-chain data reveals a pattern that initially appears concerning for Solana investors. According to Arkham Intelligence analyst Emmett Gallic, a long-dormant Solana address transferred 200,000 SOL, worth approximately $40 million, to Coinbase Prime on October 30. This movement of older coins from early investors who accumulated during quieter market phases typically sparks concerns about major holders preparing to sell. CryptoQuant data reinforces this perception, showing that large wallets have recently dominated average spot trade sizes on major exchanges, indicating that veteran, better-capitalized investors were distributing their holdings into stronger market positions.

However, this behavior isn’t inherently bearish when viewed through a broader market lens. Across major cryptocurrencies including Bitcoin, Ethereum, and Solana, experienced investors tend to sell when liquidity improves rather than during illiquid market conditions. What distinguishes the current cycle is the emergence of a new class of institutional buyers ready to absorb this supply. The traditional narrative of whale selling leading to price declines is being challenged by fundamental shifts in market structure and participant composition.

The crucial development offsetting whale distributions comes from regulated investment products. CoinShares’ weekly digital asset fund report indicates that Solana-focused products have attracted approximately $381 million in inflows for the month, bringing year-to-date flows to roughly $2.8 billion. This performance places Solana behind only Bitcoin and Ethereum as one of the top-performing crypto assets among institutional products, despite significant market pullbacks that wiped more than $20 billion from investors earlier in the month.

This institutional interest has materialized through newly launched US-listed Solana investment vehicles. Grayscale’s Solana Trust (GSOL), which converted into an exchange-traded format on October 29, recorded $1.4 million in first-day net inflows according to SoSoValue data. More significantly, Bitwise’s Solana Staking ETF (BSOL) saw a far stronger debut with $69.5 million in inflows, followed by another $46.5 million on October 29. Trading activity mirrored this enthusiasm, with BSOL recording $57.9 million in day-one volume and over $72 million the following day.

Bloomberg ETF analyst Eric Balchunas described this performance as “a strong sign of institutional demand” for Solana-linked products. The coordinated debut of multiple Solana ETFs represents a maturation point for the asset class, providing traditional investors with regulated exposure while creating a continuous liquidity sink that absorbs circulating supply.

The changing ownership dynamics are strengthening Solana’s market structure rather than weakening it. While old wallets distribute coins, those sales are being absorbed by regulated ETFs and institutional buyers with longer investment horizons. This reduces short-term speculative churn and anchors more stable, programmatic demand. Price-wise, this handoff explains why SOL has held within a $180-$200 range even as broader crypto volatility has increased.

Instead of experiencing sharp selloffs, the token has shown controlled consolidation, suggesting that newly created ETF shares are being absorbed faster than they reenter exchanges. Inflows from Bitwise’s BSOL and Grayscale’s GSOL effectively tighten the available float in spot markets. Simultaneously, Solana’s open interest has increased from under $8 billion to around $10 billion, deepening the derivatives market and providing large holders with room to de-risk positions without triggering outsized price reactions.

Together, these trends create a cushion against volatility: liquidity is broadening even as ownership concentrates among long-term vehicles. If sustained, this pattern supports a more mature phase of price discovery. SOL may continue trading sideways in the near term, but with reduced downside pressure and a more supportive base for future rallies. The key risk remains that ETF inflows could fade below roughly $100 million weekly while long-term holders continue distributing, potentially flipping the equation and pushing SOL back toward exchange supply, thereby weakening price stability.