When money moves in search of returns, it behooves investors to pay attention, and sometimes, to follow.
On that note, while there are already plenty of reasons to consider making an investment in Solana (SOL -2.83%) or XRP (XRP -3.66%), one entire class of investors with very deep pockets is signaling that they favor those two assets in particular. Here's what's going on and how to update your strategy to take advantage of it.
CRYPTO: SOL
Key Data Points
Capital will flow to the places it's already flowing
Institutional investors control a lot of capital, and they're becoming increasingly committed to investing in cryptocurrencies. Therefore, it matters what they're doing, and also what they say they intend to do in the future. To get some clarity on that front, in January Coinbase Global conducted a survey of 352 leaders at institutional investing organizations, 86% of which had more than $1 billion in assets under management (AUM).
The survey found that 83% of the investors expected to either increase or significantly increase their holdings of digital assets in 2025. That's good news for cryptocurrency investors because it means more capital will flow into the sector. But for holders of Solana and XRP specifically, the picture looks even better, to the point where they're both now better buys than before.
Of those surveyed, 34% reported they already held XRP, and 30% reported they already held Solana. When institutional investors allocate their capital to crypto, per the survey, a majority of them prefer to allocate it using an exchange-traded fund (ETF) or other exchange-traded investment rather than holding their funds on blockchains directly. And both Solana and XRP could see ETFs holding them approved for issue later this year.
So the odds are good that these investors will buy even more of those two coins than they already hold once the ETFs get approved, assuming they do. Others who don't already hold either coin are likely to initiate positions as well. Considering how much capital they have, their actions are likely to drive the prices of XRP and Solana higher. And it's very likely that there are many more institutional investors out there than just the ones surveyed by Coinbase, so the impact on price could be very significant over time.
After all, many are probably pursuing long-term strategies that will take years to play out, so the odds are good that these two coins are in the process of catching a potent tailwind.
CRYPTO: XRP
Key Data Points
Don't take this as an excuse to take bigger risks than you're comfortable with
Let's pause for a second.
It's true that Solana and XRP will probably be filling up the coffers of some big investors during the coming year and beyond. But that does not make them safe investments generally speaking, nor does it make them less volatile. Nor does it mean you need to copy what those big players are doing; their goals, risk tolerance, timelines, and strategy are almost certainly dramatically different from yours.
In other words, you should probably have a fully diversified portfolio packed with stocks and other assets before approaching cryptocurrencies. Even then, it makes sense to start off with a small allocation to these two coins because you may find that watching the prices of these coins bounce around from week to week is more of a headache than the possibility of getting a good return from them over the next few years. Buying too much of either XRP or Solana might feel like you're making a smartly aggressive move today, but that could easily become a nauseating ride if you end up taking on more risk than you're able to handle.
With that said, there's now another decent piece of evidence in favor of buying either or both Solana and XRP. Once these assets get a place in institutional portfolios, inertia could keep them there for quite a long time, and that should support higher prices, too.
