Original author: cole, vernacular blockchain

In the crypto world, the flow of capital is always the most honest language. While retail investors are still frantically chasing the next 100-fold MeMe coin, a deeper and more powerful undercurrent of capital is quietly reshaping the market landscape. This force comes from Wall Street's top investment institutions—those "smart money" known for their calm and rational approach, managing trillions of dollars.

And their new favorite is Solana (SOL).

This isn’t just another “Ethereum killer” cliché, nor is it a short-lived speculative frenzy. It’s a carefully planned strategic rotation, a deliberate reallocation of assets by institutional investors as the crypto market matures.

01 Four major evidences of institutional entry

The most powerful way to prove the occurrence of a capital rotation is to show the flow of real money:

1) ETP funds continue to attract capital, with net inflows for 21 weeks

According to a September 2025 report from CoinShares, a leading digital asset management company, Solana-focused investment products have seen net inflows for the 21st consecutive week. Year-to-date, these products have seen cumulative net inflows totaling $1.16 billion. For an emerging, high-growth asset, this sustained, multi-month buying pressure is a powerful testament to the long-term bullish sentiment of institutional investors.

This ability to attract capital is global. In Canada, the Solana Staking ETF (ticker: SOLQ), issued by 3 iQ, has surpassed CAD$300 million in assets under management (AUM), making it the dominant player in the market. In Europe, renowned issuers such as VanEck and 21 Shares have already launched a variety of Solana ETP products, some of which even include staking-based interest-earning features, providing institutions with a convenient way to earn passive income.

2) ARK Invest’s proactive approach and public rebalancing

If the continued inflow into ETPs represents the general market sentiment, then the public portfolio adjustments of top actively managed funds reveal the strategic intentions of the most cutting-edge investors.

In April 2025, ARK's funds were systematically selling their Bitcoin ETF holdings and instead heavily investing in Canada's 3 iQ Solana Staking ETF (SOLQ). In just two trading days, ARK spent over $10 million and acquired nearly 1 million shares of SOLQ.

This is more than a simple asset rebalancing; it's a proactive decision based on a clear investment rationale. ARK is optimistic not only about Solana's growth potential, but also its interest-earning nature, which can generate staking returns. Furthermore, ARK has entrusted its fund's Solana validator operations to SOL Strategies, a professional, publicly listed company. This demonstrates its deep involvement in maintaining the security and stable operation of the Solana network, extending beyond a passive financial investor.

3) The rise of the “Solana version of MicroStrategy”: a new narrative for corporate treasuries

Remember when MicroStrategy pioneered the “Bitcoinization of corporate treasury” by continuously buying and holding Bitcoin? Now, the same story is happening with Solana.

In September 2025, Forward Industries, a publicly listed company, announced a $1.6 billion SOL investment plan as part of its strategic treasury diversification, and the plan was supported by top crypto venture capital firms such as Multicoin Capital, Galaxy Digital, and Jump Crypto.

These companies not only buy SOL but also generate returns through staking, effectively locking a large number of tokens out of circulation. On-chain data shows that as of September 2025, at least 17 institutional entities collectively hold over 11.73 million SOL tokens, valued at $2.9 billion, representing nearly 2.04% of the circulating supply.

4) The final push for US spot ETFs, the final countdown before the explosion

If the above evidence represents the vanguard of “smart money,” then the approval of the US spot Solana ETF will be the “general attack signal” to open the floodgates of mainstream Wall Street capital.

Wall Street giants including VanEck, Bitwise, Franklin Templeton, Fidelity, and Grayscale have all submitted applications to the U.S. Securities and Exchange Commission (SEC) for a spot Solana ETF. Despite repeated delays from the SEC, market analysts generally predict a high probability of approval before the end of 2025.

The strong anticipation of this event has already begun to influence market behavior. Even after the news of the SEC’s postponement, the price of SOL has shown strong resilience, indicating that investors are confident in the final outcome.

These four pieces of evidence are closely linked and together paint a clear picture: institutional capital is systematically and continuously flowing into the Solana ecosystem through various channels such as ETPs, active funds, and corporate treasuries.

Once the "shoe" of the US spot ETF drops, this capital feast will officially enter its climax.

02 Why Solana?

The flow of capital is never without reason. Wall Street's "smart money" chose Solana because it demonstrates unique and irreplaceable advantages in technical architecture, ecological vitality, and market trends.

Advantage 1: Performance Monster - The Ultimate Experience of Monolithic Architecture

Imagine a 65-lane superhighway with endless traffic, and a city road network connected by countless toll booths and overpasses. This is the fundamental architectural difference between Solana and many other blockchains.

Solana employs a monolithic architecture, dedicated to achieving extreme speed and throughput on a single blockchain. Its unique Proof of History consensus mechanism enables parallel transaction processing, like a multi-lane superhighway. This results in astonishing performance figures:

• Ultra-high throughput: The theoretical peak exceeds 65,000 transactions per second (TPS), and the daily stable operation is 3,000-5,000 TPS.
• Lightning speed: The transaction final confirmation time is less than 3 seconds, which is almost instant.
• Extremely low cost: The average fee per transaction is only about $0.00025, which is so cheap that it can be ignored.

For use cases requiring high-volume, high-frequency, low-value transactions—such as payments, gaming, social networking, and the Internet of Things—Solana's architecture provides an unparalleled user and developer experience. As a Grayscale Research report notes, Solana achieves high performance on a single layer, avoiding the "liquidity fragmentation and more cumbersome user experience" associated with other multi-layered approaches. This architectural simplicity and efficiency are the technical cornerstone of its appeal.

Advantage 2: Ecological Gravity - Seizing Three High-Growth Tracks

If exceptional performance is Solana's "hardware," then its thriving ecosystem of applications is its "software." Leveraging its technological advantages, Solana has established a commanding leadership position in three emerging sectors with significant growth potential.

1) DePIN

DePIN, hailed as the next trillion-dollar platform, aims to use blockchain to incentivize users to co-build and share real-world infrastructure (such as wireless networks, map data, and energy grids). These applications require processing millions of micropayments, placing extremely stringent requirements on network performance and cost. Solana is one of the few public chains that can meet this demand. Consequently, leading projects in this field, such as Helium (decentralized 5G network), Hivemapper (decentralized mapping), and Render (decentralized GPU rendering), have migrated to or built directly on Solana, collectively generating over $10 billion in market capitalization.

2) DeFi

Solana's decentralized exchanges (DEXs) demonstrate remarkable capital efficiency. Data shows that between late 2024 and early 2025, Solana's DEX trading volume frequently accounted for the vast majority of global volume, sometimes exceeding 80%. This means that every dollar locked in the Solana DeFi ecosystem generates more economic activity than on other chains, a key indicator of the health and vitality of a financial ecosystem.

Although the vast majority of transaction volume is contributed by MeMe, the active power of the Solana chain during the MeMe super cycle cannot be denied.

3) Payment

When a traditional financial giant chooses a blockchain to build its future payment network, it's a powerful endorsement. Two major payment giants, Visa and PayPal, have chosen to launch their stablecoin and payment projects on Solana, precisely because of its speed and low cost advantages in processing large-scale transactions.

03 Wall Street’s Investment Logic: The Art of Solana’s Valuation

After understanding Solana’s technological and ecological advantages, we also need to stand in the perspective of investors and see how they evaluate Solana’s value and include it in their investment portfolios.

1) The allure of high Beta

One of Solana’s most attractive quantitative arguments for institutional investors seeking outsized returns is its relatively small market capitalization. By Q3 2025, Solana’s market capitalization is estimated to be approximately $119.4 billion, compared to Bitcoin’s $2.2 trillion.

Matt Hougan, Bitwise’s chief investment officer, has a brilliant “capital amplification” theory: Due to this massive disparity in scale, the same inflow of funds will have a far greater impact on Solana’s price than Bitcoin. He calculated that a $1.6 billion purchase of Solana could have the same market impact as a $33 billion purchase of Bitcoin.

This means Solana is a high-beta asset. During a bull market, when the entire crypto market is buoyed by capital inflows, allocating a portion of Solana to a position could yield returns far exceeding the market average. This is extremely tempting for performance-driven fund managers.

2) The appeal of “interest-earning assets”

In a global macroeconomic environment characterized by low or even negative interest rates, "interest-bearing assets" that can generate stable cash flows are highly sought after. Solana, through its Proof-of-Stake (PoS) mechanism, offers holders an attractive staking yield.

Currently, Solana's native staking yields an annualized rate of return of approximately 7.16%. For institutions holding Solana for the long term, this means not only the potential for capital appreciation, but also a substantial "interest" income denominated in Solana. This is precisely why ARK Invest chose to invest in the SOLQ ETF with staking functionality rather than a standard ETF. This dual "asset + return" attribute greatly enhances Solana's appeal as a long-term investment.

3) “Nasdaq for digital assets”

Wall Street loves simple, clear, and imaginative stories. Solana offers a perfect narrative: it aims not to be the digital gold (like Bitcoin) or the global financial settlement layer, but rather to be the Nasdaq of the on-chain consumer economy.

This positioning is incredibly accurate. Nasdaq is a global hub for high-tech, high-growth companies. Solana, with its high performance, low costs, and superior user experience, is becoming the platform of choice for all consumer-facing, high-frequency, on-chain applications (such as gaming, social networking, payments, and Decentralized Payments). This tells investors that investing in Solana means investing in the gateway for the next billion users to enter Web 3 and the future of the entire on-chain consumer economy.

4) “Made in the USA” label

In an era of increasing emphasis on technological sovereignty and supply chain security, a project's nationality is becoming a key consideration for institutions. Solana has a potential advantage in this regard that's underappreciated by the market: it's a "Made in the USA" blockchain.

Solana Labs is a US-based company founded by former top Qualcomm engineers. Its ecosystem boasts strong ties with top US VCs (such as Multicoin, Jump, and Galaxy) and institutions. With the new US administration demonstrating an increasingly pro-crypto stance and emphasizing keeping technological innovation domestically, Solana's "local" status could provide unexpected regulatory and political tailwinds. This is undoubtedly a significant advantage for institutional investors seeking long-term certainty.

04 Summary

The rotation of institutional capital into Solana has not only changed the fate of Solana itself, but is also profoundly affecting the future landscape of the entire crypto market.

Of course, the road to the future is never smooth. Solana faces its own challenges. While its network stability has maintained continuous uptime for over 15 months since the beginning of 2024, sporadic outages in the past remain a thorn in the side of investors. Furthermore, its high validator hardware requirements have led to ongoing discussions about the network's degree of centralization.

However, judging by Wall Street's actions, these risks appear to have been priced in. What they see is an ecosystem that is constantly iterating and growing stronger in the face of adversity, a future giant that has found clear product-market fit and is being systematically invested in by "smart money."

The conclusion is simple: when Wall Street gets serious, the game changes. And this time, they’re after Solana.