Crypto ETFs See $812M Outflows as Investors Shift to Altcoins

Digital asset investment funds worldwide shed $812 million in total last week, according to data from digital asset manager CoinShares. The outflows were heavily concentrated in the two largest cryptocurrencies, with Bitcoin ETFs accounting for $719 million of the total outflows and Ethereum funds seeing $409 million pour out. These substantial withdrawals contributed to price declines for both leading digital assets as investors engaged in what analysts described as “profit-taking and portfolio rebalancing.”

The broader market sentiment was influenced by changing expectations for U.S. monetary policy. According to the CoinShares report, “expectations for two U.S. interest rate cuts this year moderated following stronger than anticipated macroeconomic data, particularly the revised GDP and durable goods figures.” This shift in interest rate expectations created headwinds for the crypto market overall, though analysts maintained that the digital asset space still has room to run despite the recent outflows.

While Bitcoin and Ethereum faced significant outflows, alternative cryptocurrencies demonstrated remarkable resilience. Investors pumped $291 million into funds giving exposure to SOL, the sixth-biggest coin by market cap, and over $93 million into XRP investment vehicles. These inflows represented a clear divergence from the broader market trend and highlighted growing investor interest in altcoin exposure beyond the two dominant cryptocurrencies.

SOL was recently trading slightly above $210 per coin, up 3% over the past day but still down almost 5% over a seven-day period, according to CoinGecko. Meanwhile, XRP’s price recently stood at $2.90, up 3% on the day. The Solana blockchain, which uses SOL as its native asset for transactions, has become a popular platform for developers building decentralized applications ranging from first-person shooter games to decentralized finance lending protocols.

XRP, created by the founders of fintech company Ripple, serves as a digital coin designed to facilitate quick cross-border money transfers. The recent inflows into XRP funds coincided with the launch of the first spot XRP and Dogecoin ETFs in the U.S. earlier this month from Rex Shares and Osprey Funds, which generated significant initial demand from investors seeking diversified crypto exposure.

The contrasting flows between major cryptocurrencies and select altcoins suggest a maturing market where investors are becoming more selective in their digital asset allocations. While the $812 million in total outflows represented a significant weekly movement, the gains in Solana and XRP funds, along with small inflows into Sui and Cardano funds, helped balance the overall picture.

This rebalancing activity comes at a time when the crypto ETF landscape is expanding beyond Bitcoin and Ethereum. The successful launch of spot XRP and Dogecoin ETFs indicates growing institutional acceptance of alternative digital assets and provides investors with more targeted exposure to specific blockchain ecosystems. As the market continues to evolve, the divergence between different cryptocurrency investment products may become more pronounced, reflecting varying investor confidence in different blockchain technologies and use cases.