Institutional appetite for digital assets is undergoing a notable shift, as recent data reveals a growing preference for altcoins like XRP and Solana over Bitcoin. According to a comprehensive report by CoinShares, major investment firms are actively increasing their exposure to XRP and Solana, even as they scale back on their Bitcoin holdings. This repositioning coincides with the launch of new spot Exchange-Traded Funds (ETFs) tied to these alternative cryptocurrencies in the United States.
Solana has emerged as a clear institutional favorite, attracting inflows of $421 million in the past week alone—marking the second-largest weekly inflow on record for the asset. XRP funds also saw impressive traction, pulling in $43.2 million during the same period. In stark contrast, Bitcoin ETFs experienced a significant net outflow of $946 million, making BTC the only major digital asset to suffer such losses.
Analysts attribute the Bitcoin ETF outflows in large part to recent macroeconomic signals. Following the Federal Open Market Committee (FOMC) meeting, Federal Reserve Chair Jerome Powell delivered a hawkish speech, dampening hopes for a near-term interest rate cut. This created a wave of uncertainty across financial markets, prompting investors to reevaluate their exposure to riskier assets like Bitcoin.
Meanwhile, the timing couldn’t have been better for the launch of Solana-based ETFs by industry giants like Bitwise and Grayscale. These products debuted last week and immediately saw robust inflows. According to blockchain analytics platform SoSoValue, Solana ETFs alone drew nearly $200 million in net inflows within their first week of trading. For comparison, spot Bitcoin ETFs recorded a net outflow of almost $800 million over the same period.
Bloomberg’s ETF analyst Eric Balchunas noted that Bitwise’s Solana ETF led all other crypto ETFs in weekly flows, even outperforming BlackRock’s Bitcoin ETF, which stumbled amid declining investor confidence. This surge in demand has fueled speculation about Solana’s growing legitimacy as a long-term investment vehicle.
XRP has also captured institutional attention, especially with the possibility of a spot XRP ETF launching as soon as November 13. Canary Capital, one of the early movers in this space, recently updated its S-1 filing, removing a delay clause and signaling readiness for a November launch. According to the company’s CEO, Steve McClurg, XRP ETFs could attract between $5 billion and $10 billion in inflows within their first month on the market.
In addition to Canary Capital, both Grayscale and Bitwise have filed amendments for their own XRP ETFs. These companies are reportedly following a similar strategy to the one used for their successful Solana ETF launches. Although the XRP ETF issuers did not engage in back-and-forth negotiations with the SEC—unlike the Solana ETF issuers—they remain optimistic about approval.
The potential launch of XRP ETFs has sparked renewed enthusiasm among institutional investors, many of whom already have exposure to the asset through futures contracts and derivatives platforms like the CME. Market analyst Nate Geraci believes that demand for XRP ETFs could be substantial, positioning them alongside existing heavyweights like Bitcoin, Ethereum, and Solana ETFs.
This growing interest in alternative cryptocurrencies highlights a broader trend in the digital asset space. Institutional investors are seeking diversified exposure beyond Bitcoin, driven by evolving market dynamics, regulatory clarity around altcoins, and the emergence of new tradable products.
Several factors are contributing to this shift. First, the underperformance of Bitcoin in recent months has made investors more receptive to assets with stronger narratives or more favorable technical setups. Second, XRP and Solana both offer unique value propositions: XRP is closely tied to cross-border payment solutions, while Solana is known for its high-speed, low-cost blockchain infrastructure, making it attractive for decentralized applications.
Moreover, the regulatory environment appears to be softening around certain altcoins. XRP, for instance, has benefited from partial legal clarity following Ripple Labs’ ongoing legal battle with the SEC. Although the case is still unfolding, a recent ruling that XRP is not a security when traded on secondary markets has boosted investor confidence.
Solana, on the other hand, continues to benefit from its strong developer ecosystem and growing adoption in the decentralized finance (DeFi) and non-fungible token (NFT) spaces. Its performance metrics, including transaction throughput and network uptime, have made it a viable Ethereum competitor, further justifying institutional interest.
Looking ahead, the success of XRP and Solana ETFs could set a precedent for other altcoins to follow suit. Ethereum, which already enjoys ETF exposure, may soon be joined by other Layer 1 and Layer 2 solutions if regulators continue to show flexibility.
Additionally, as digital assets become more integrated into traditional financial systems, the role of ETFs will likely grow. These instruments provide a regulated, accessible way for institutional players to gain exposure to crypto without directly holding the underlying assets. This reduces custodial risk and simplifies compliance, making the asset class more palatable for large-scale investors.
Ultimately, the shift from Bitcoin to altcoins like XRP and Solana among institutional investors is not just a passing trend—it reflects a maturing market that is expanding beyond a single narrative. As ETF offerings diversify and regulatory frameworks become clearer, we can expect a broader range of digital assets to attract institutional capital in the months and years ahead.