Altcoin ETFs Defy Downturn: Solana and XRP Funds Surge

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

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While the  “OG” crypto ETFs, Bitcoin and Ethereum, have been collecting 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 1-Day Outflow Since February.

Bitcoin’s dip below $100,000 is also driving traditional investors to reassess their regulated BTC exposure. Exchange-traded funds based on the world’s most valuable crypto are 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 have been marked by significant capital outflows. 

On November 13, BTC investment vehicles registered the largest single-day outflows in 9 months, totaling more than $860 million in withdrawals.

Meanwhile, Ethereum ETFs are not faring much better. Over $1.7 billion in capital has left Ethereum funds over the last 4 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 crypto exposure just yet. Recent performance in Solana and XRP ETFs suggests that capital may be rotating to these newer products, instead of exiting the asset class altogether.

XRP ETFs Steal the Spotlight

Solana ETFs, soon to become 1-month old on October 28, have yet to register meaningful negative results in the market. 

So far, Solana ETFs by Grayscale and Bitwise are going against the grain when it comes to fund flows, consistently attracting capital even as Bitcoin and Ethereum products bleed. As of today, these funds have collectively over half a billion in net assets, representing around 0.6% of the total Solana supply. 

Meanwhile, Canary Capital's XRP ETF (XRPC), as the latest product on the shelf, is gaining significant traction as traditional investors enjoy the opportunity to gain XRP exposure for the first time.

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. Only a day later, the fund had already seen over $240 million in inflows, marking a significant contrast to the sluggish performance of legacy crypto ETFs.

All data from SoSoValue

While this contrast will likely stabilize over the next weeks, as cryptocurrency ETFs are generally trading on par with broader market sentiment, this phenomenon suggests that Wall Street still has a strong demand for altcoins, even amid a broader downturn in the digital asset market.