Institutional Investors Favor XRP and Solana Over Bitcoin Amid New Altcoin ETFs
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Institutional Shift: XRP and Solana Gain Traction as Bitcoin Loses Appeal
Recent trends in the cryptocurrency market highlight a notable shift in institutional preferences. Investors are increasingly gravitating towards XRP and Solana, simultaneously reducing their Bitcoin holdings. This trend aligns with the introduction of new altcoin ETFs in the United States, which offer direct exposure to these emerging cryptocurrencies.
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Institutional Investment Patterns: A Closer Look
According to a comprehensive report by CoinShares, institutional investors have shown considerable interest in XRP and Solana, even as they divest from Bitcoin. The Solana funds, buoyed by the launch of U.S. spot Solana ETFs, have witnessed substantial inflows, amounting to $421 million—the second-largest on record. Similarly, XRP funds have seen inflows totaling $43.2 million. In contrast, Bitcoin ETFs experienced significant outflows, reaching $946 million, marking Bitcoin as the sole cryptocurrency to record a net outflow.
The report suggests that these Bitcoin outflows may be attributed to Federal Reserve Chair Jerome Powell’s recent speech, which conveyed a cautious stance on potential rate cuts in December, thereby stirring market uncertainties. Despite this, the newly launched altcoin ETFs have attracted attention, leading to increased inflows into XRP and Solana funds.
Newly introduced Solana ETFs by Bitwise and Grayscale have shown impressive performance in their initial week, as reflected in data from SoSoValue, which indicates a net inflow of nearly $200 million. Conversely, the U.S. spot Bitcoin ETFs recorded a net outflow approaching $800 million.
Bloomberg analyst Eric Balchunas highlighted Bitwise’s Solana ETF as the leader in weekly inflows among crypto ETFs, even surpassing BlackRock’s Bitcoin ETF, which faced challenges. This shift has also impacted Bitcoin’s market performance, with its price struggling to surpass the $110,000 threshold.
Anticipated Launch of XRP ETFs: A Market Game Changer
There is growing optimism surrounding XRP, with expectations for a spot ETF launch as early as November 13. Canary Capital, a key asset manager, has amended its S-1 filing, paving the way for a potential launch on this date. Steve McClurg, the firm’s CEO, projects that XRP funds could attract between $5 billion and $10 billion within the first month, significantly boosting the XRP ecosystem.
Both Grayscale and Bitwise are preparing amendments for their XRP ETFs, potentially launching shortly after Canary Capital’s debut. These firms aim to emulate the success of their Solana ETFs. Notably, unlike the Solana ETF issuers, the XRP ETF proponents have not engaged in extensive dialogues with the SEC, yet they remain optimistic about the outcome.
Industry experts, including Nate Geraci, predict strong demand for XRP ETFs, given its existing popularity among institutional investors through CME futures and futures ETFs.
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