The cryptocurrency industry has had a rough beginning in 2022 as much of it has remained on a downward spiral for the past few weeks. Its global market cap was sitting at $2.1 trillion at the time of writing, having shed off over 3% of its valuation in the past day. Much of this can be attributed to the BTC sell-off that saw the coin slipping below $42,000, however, the altcoin market has been experiencing a similar fate.
This trend has been translated in the trading patterns of the top digital assets Bitcoin and Ether, both of which have been registering record outflows for the past several weeks. According to Coinshares’ most recent report, Bitcoin saw outflows in excess of $55 million in the week ending on January 17, while the negative sentiment around Ether resulted in outflows totaling $30 million during the same time.
Solana going against the tide
Breaking the bearish tide was Solana‘s native token, as the ‘investor favorite’ saw inflows totaling $5.4m last week. The report added that the digital asset has experienced barely two individual weeks of outflows since August 2021, highlighting the continued positive sentiment around it.
This was around the same time that the network had made headwinds as a potential competitor to Ethereum due to its significantly lower transaction costs and high speed. Since then, the smart contract platform has emerged as an alternative for many to launch DeFi and NFT projects, with Solana’s total DeFi TVL reaching a record high of over $12 billion in October last year.
The network has also pledged to turn carbon neutral in 2022, as environmental concerns remain one of the biggest roadblocks to the mass acceptance of cryptocurrencies.
This surge in popularity has also been accompanied by praise from financial experts across industries, including the Bank of America which last week claimed that Solana would soon beat Ethereum to become the “Visa of the digital asset world” due to its comparatively faster settlement capabilities.
It should be noted here, however, that Solana has frequently been witnessing congestion issues along with denial-of-service (DDoS) attacks. This has significantly worked against the network’s outlook as a viable alternative to the ever congested Ethereum.
Moreover, other ETH-killers also pose a significant threat to Solana’s succession. This was recently seen playing out in Cardano‘s significant uptrend over the past week. During this time, its native asset ADA even overtook Solana to become the fifth-largest cryptocurrency in terms of market capitalization. Late last year, the network has reached a significant milestone by successfully exceeding 20 million transactions over 1500 days of no downtime.