Institutions Rotate from Bitcoin to XRP Amid Market Pressure

The latest Digital Asset Fund Flows report from CoinShares reveals a clear institutional pivot. Bitcoin recorded $264 million in outflows over the measured week, extending its year-to-date withdrawals to a substantial $984 million. This pattern indicates institutions are actively reducing their exposure to the flagship cryptocurrency, a move beyond simple portfolio rebalancing. In stark contrast, XRP attracted $63.1 million in weekly inflows, the highest figure across all tracked assets. This has pushed its cumulative inflows for the year to $109 million, positioning it as the strongest target for institutional allocation so far in 2025.

Other major assets paled in comparison to XRP’s inflow dominance. Solana drew a modest $8.2 million, while Ethereum recorded just $5.3 million. This concentration confirms the rotation is targeted rather than a broad-based shift across the crypto market. The regional breakdown of flows further underscores this narrative. Germany led with $87.1 million in inflows, followed by Switzerland ($30.1 million), Canada ($21.4 million), and Brazil ($16.7 million). The United States, however, moved decisively in the opposite direction, posting $214 million in weekly outflows and contributing to a massive $1.464 billion in cumulative withdrawals from U.S.-listed products.

Despite XRP’s leadership in capital attraction, its price tells a different story. The asset is currently trading around $1.42, down 12.3% over the past week. This drop highlights a critical market condition: inflows are being absorbed without translating into immediate price appreciation. The broader context reveals why. Total assets under management (AUM) across all digital asset investment products have fallen to $129.8 billion, the lowest level since March 2025. This contraction of the institutional capital base means that new allocations, even significant ones like those into XRP, carry less price impact than they would in an expanding market.

Compounding the pressure are telling trading dynamics. Exchange-traded product (ETP) volumes surged to a record $63.1 billion, surpassing the previous peak of $56.4 billion set in October. High volume alongside falling prices typically signals distribution, liquidations, or hedging activity—not accumulation by bullish investors. Furthermore, the net outflow for all digital asset investment products stood at $187 million for the week. This crucial figure indicates that while some Bitcoin capital is rotating into XRP, a meaningful share is exiting the crypto ecosystem entirely, diluting the potential price impact of the inflows targeting specific assets.

Bitcoin’s systemic role as the market’s primary liquidity anchor amplifies these effects. Sustained outflows from BTC create a correlation drag across the entire digital asset spectrum, limiting XRP’s ability to decouple and respond positively to its own inflow momentum. The pervasive selling pressure from the largest cryptocurrency weighs on market sentiment and valuation models industry-wide.

Analysts at CoinShares note a potentially silver lining within the outflow trend: while outflows persist, their pace is slowing. This pattern is often associated with late-cycle capitulation, which can precede potential bottom formation. Within this framework, XRP’s notable inflows may represent early institutional positioning by certain regions ahead of an anticipated market stabilization, rather than acting as a catalyst for immediate price expansion. The current environment, characterized by record trading volumes, contracting AUM, and regional flow divergence, suggests the market is undergoing a complex re-pricing. The rotation from Bitcoin to XRP is a prominent feature of this phase, but its bullish implications for XRP’s valuation remain muted until broader liquidity conditions improve and the systemic pressure from Bitcoin outflows abates.