Spot ETFs for bitcoin and ethereum have experienced four consecutive months of outflows totaling over $9 billion since November, while XRP and solana ETFs continue to see inflows. This divergence suggests investors are rotating toward altcoins amid market pressures. Experts describe it as standard portfolio adjustments rather than a full retreat from cryptocurrencies.
Investors in cryptocurrency exchange-traded funds (ETFs) showed signs of rotation last month, with major assets facing outflows while smaller ones attracted inflows. Spot bitcoin ETFs recorded $206.5 million in outflows, marking the fourth straight month of redemptions. Ethereum spot ETFs saw heavier withdrawals of $369.9 million, also their fourth consecutive monthly outflow. Since November, these bitcoin and ethereum ETFs have cumulatively lost more than $9.1 billion, with bitcoin ETFs accounting for $6.39 billion and ethereum for $2.76 billion over the four-month period.
This trend aligns with price declines: bitcoin fell from a peak of over $126,000 in early October to around $67,000, nearly halving in value. Ethereum dropped more than 60% from highs above $4,950 in August of the previous year. The outflows indicate a collapse in institutional appetite, following strong inflows in 2024 and after pro-crypto U.S. election outcomes, which had fueled earlier bull runs. Demand waned after an early October crash attributed to pricing issues on the Binance exchange, though recent days have seen sporadic inflows.
In contrast, spot XRP ETFs drew $58 million last month and have posted positive flows every month since their November launch. Spot solana ETFs attracted $63 million and have remained in positive territory since debuting in October. Chris Soriano, cofounder and chief commercial officer at BridgePort, explained the pattern: “It’s no surprise when institutions start laying off risk or meet redemptions, they naturally sell what’s most liquid first. This is no different than when a traditional fund manager trims S&P 500 exposure before touching their small-cap growth positions.”
Soriano described the shifts as a “rotation regime,” where institutions trim core holdings like bitcoin and ethereum while adding to higher-beta positions in XRP and solana. He noted that thinner markets for these altcoins amplify inflow signals. Nic Roberts-Huntley, CEO and cofounder of Blueprint Finance, suggested the moves “may signal a broader market transition, one where capital increasingly chases specific use cases rather than the entire asset class moving in lockstep.” Analysts emphasize that sustained inflows would be needed for a market recovery.
