Altcoin ETFs Defy Downturn: Solana and XRP Funds Rise

Although cryptocurrencies are experiencing a downturn, Wall Street is experiencing a renewed interest in altcoin ETFs.

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While the “OG” crypto ETFs, Bitcoin and Ethereum, have collected massive outflows over the past week, newer exchange-traded funds tied to Solana and XRP are seeing strong inflows. Especially the latter, as Canary Capital’s XRP ETF is currently the “new kid in the block” among crypto-backed securities.

Bitcoin ETFs See Largest One-Day Outflows Since February.

Bitcoin’s dip below $100,000 is also prompting traditional investors to reassess their regulated BTC exposure. Exchange-traded funds based on the world’s most valuable cryptocurrency have been experiencing a wave of outflows since late October, driven by a combination of profit-taking and shifting sentiment toward higher-beta plays.

Since October 29, Bitcoin ETFs have seen only two days of meaningful inflows, while the other days were marked by significant capital outflows.

On November 13, BTC’s investment vehicles recorded the largest single-day outflow in nine months, with a total of more than $860 million in withdrawals.

Meanwhile, Ethereum ETFs aren’t doing much better. More than $1.7 billion in capital has disappeared from Ethereum funds in the past four weeks, marking a significant performance shift in that market.

But while traditional crypto ETFs are bleeding, it doesn’t necessarily mean investors are pulling away from cryptocurrency exposure just yet. Recent performance of Solana and XRP ETFs suggests that capital could be rotating into these newer products, rather than leaving the asset class altogether.

XRP ETFs steal the spotlight

Solana ETFs, which will soon turn one month old on October 28, have yet to see any meaningful negative performance in the market.

So far, Grayscale and Bitwise’s Solana ETFs are going against the grain when it comes to fund flows, consistently attracting capital even as Bitcoin and Ethereum products deflate. Currently, these funds collectively have over half a billion in net assets, which represents approximately 0.6% of the total Solana offering.

Meanwhile, Canary Capital’s XRP ETF (XRPC), as the newest product on the shelf, is gaining significant popularity as traditional investors get their first chance to gain XRP exposure.

Canary Capital launched the product last week and on its first day, the XRP-based financial vehicle broke the record as the most traded ETF on its first day. Just a day later, the fund had already seen inflows of more than $240 million, providing a significant contrast to the sluggish performance of older crypto ETFs.

All data from SoSoValue

While this contrast is likely to stabilize in the coming weeks as cryptocurrency ETFs generally trade in line with broader market sentiment, this phenomenon suggests that Wall Street still has strong demand for altcoins, even amid a broader downturn in the digital asset market.