CoinShares' recent findings reveal a noteworthy uptick in hedge funds and wealth managers allocating to Solana compared to earlier this year.

According to CoinShares, institutional investors seem to be expanding their exposure beyond major cryptocurrencies to include altcoins like Solana, which has witnessed a substantial surge in allocations from hedge funds and wealth managers.

James Butterfill, CoinShares' head of research, noted a heightened optimism among investors regarding Solana, based on a survey of 64 investors managing a combined $600 billion in assets. The survey indicated that nearly 15% of respondents had invested in SOL, a notable increase from CoinShares' previous survey in January, where none of the participants had any investment in the altcoin.

In contrast, XRP saw a significant decline in investor interest, with none of the respondents holding it in the current survey compared to January.

Although XRP wasn't held by the surveyed institutions, investment products for the cryptocurrency did witness allocations, with CoinShares' report showing minor inflows of $1.3 million to XRP products for the week ending April 19.

Solana ranked third in terms of the "most compelling growth outlook," with just under 15% of respondents expressing agreement, marking an increase from over 10% in the January survey. Bitcoin remained the top choice for investors, with 41% considering it to have the best growth potential, followed by Ether at just over 30%. However, Ether's appeal saw a slight decrease from around 35% since January.

The survey also highlighted a rise in the percentage of cryptocurrency in investors' portfolios, reaching 3% compared to 1.3% in January, marking the highest weighting since the survey began in 2021. Equities remained the most weighted asset class at over 55%.

Despite the positive sentiment toward crypto, wealth managers and institutional investors cited significant barriers to entry into the asset class. Regulation was identified as a major obstacle preventing some respondents from investing in crypto, while those already invested highlighted regulatory and political risks as their top concerns, which increased compared to the January results. However, concerns regarding volatility and custody appeared to be diminishing, which was viewed as an encouraging sign.