Institutional Investors Shift Focus from Bitcoin to Ethereum, Solana, and XRP
In a dynamic shift within the cryptocurrency market, institutional investors are increasingly redirecting their focus from Bitcoin (BTC) to other promising digital assets like Ethereum (ETH), Solana (SOL), and XRP. A recent report by CoinShares highlights this evolving trend, indicating a significant movement of funds towards these altcoins as they capitalize on recent price drops, despite Bitcoin experiencing substantial outflows.
Record Bitcoin Outflows Driven by US Institutions
According to the CoinShares report dated October 20, the previous week witnessed one of the most significant outflows from digital asset investment products this year. Following a liquidity shock on October 10, net outflows from crypto Exchange-Traded Products (ETPs) reached an impressive $513 million. This brings the total outflows since the liquidation event to $668 million, showcasing a shift in sentiment among institutional investors, particularly those based in the United States.
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The US market faced the most intense selling pressure, with $621 million in Bitcoin being offloaded by institutional investors. While the US experienced these severe outflows, other countries like Germany, Switzerland, and Canada saw inflows of $54.2 million, $48 million, and $42.4 million, respectively, as investors in these regions took advantage of the price dip to increase their holdings.
Bitcoin suffered the most during this liquidity event, recording a staggering $946 million in outflows. This sell-off was fueled by a decline in confidence among US institutional investors, exacerbated by the Binance liquidity incident and a steep 100% tariff increase on Chinese imports.
Despite these challenges, Bitcoin’s Year-to-Date (YTD) inflows are now at $29.3 billion, a noticeable decline from the $41.7 billion recorded in 2024. Nevertheless, trading activity in the digital asset market remained robust, with weekly trading volumes for ETPs reaching $51 billion, almost double the average weekly volume for the year.
Growing Interest in Ethereum, Solana, and XRP
While Bitcoin faced a decline in institutional support, Ethereum, Solana, and XRP emerged as attractive alternatives. Ethereum led the pack, attracting $205 million in new inflows as investors took advantage of its price weakness. Additionally, a 2x leveraged Ethereum ETP witnessed inflows totaling $457 million, marking the largest weekly inflow recorded by CoinShares.
Solana and XRP also experienced significant interest, driven by anticipation over potential ETP launches. Solana attracted $156 million in inflows, while XRP saw $73.9 million in new investments. These trends indicate a shift in institutional portfolios, with investors increasingly optimistic about the long-term prospects of Ethereum, Solana, and XRP.
According to CoinMarketCap’s latest data, Bitcoin’s price has decreased by over 3%, currently trading around $107,589. Ethereum has also seen a decline of more than 4.8%, with its price at $3,864. Meanwhile, Solana and XRP have fallen to $183 and $2.42, respectively, representing declines of 4.78% and 1.23%.
Conclusion: A New Era for Institutional Investments
This recent market shift indicates a growing diversification in institutional investment strategies, moving beyond Bitcoin to explore the potential of other cryptocurrencies. As the market continues to evolve, Ethereum, Solana, and XRP may become increasingly prominent in institutional portfolios, reflecting a broader acceptance of a more diverse range of digital assets.
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