In brief
- Altcoin ETFs including XRP and Solana posted daily inflows Monday, amid the crypto market selloff.
- However, XRP’s $89M weekly inflows contrast with Solana ETFs, which have seen $156M in weekly outflows, per CoinShares.
- An analyst says XRP’s regulatory optimism is attracting capital while Solana faces perceived technical risk.
U.S. spot altcoin exchange-traded funds posted daily inflows Monday, amid a broader crypto market selloff that has pushed overall sentiment into fearful territory.
Spot Solana ETFs have attracted $843.81 million in total net assets since their inception, noting $57.99 million in inflows on Monday, according to SoSoValue data. Likewise, spot XRP ETFs have raised $628.82 million, attracting a whopping $164.04 million in inflows on the same day.
This sustained demand stems from risk-management-based capital rotation and improved regulatory clarity, experts told Decrypt.
Addressing the inflows
“This is a combination of selective investor interest and risk management,” Czhang Lin, head of LBank Labs, told Decrypt. It suggests many investors are holding for the long term, treating the current selloff as an opportunity rather than a signal to exit, Lin explained.
The divergence between altcoins is stark.
While Solana and XRP ETF products saw sustained daily inflows, CoinShares’ weekly report highlights a key difference between the two. Solana saw $156 million in outflows last week, while XRP bucked the trend with $89 million in inflows.
“Solana has experienced technical and network challenges recently, which increases perceived risk,” the LBank Labs analyst said, explaining the discrepancy. “With XRP, however, it is benefiting from both institutional interest and regulatory optimism, making it more attractive for inflows.”
Franklin Templeton’s spot XRP ETF, XRPZ, debuted on the New York Stock Exchange Arca on Monday, which is another reason for the discrepancy.
This contrasting dynamic is a hallmark of a cautious market.
“In the current risk-off environment, assets with clearer, less speculative narratives tend to hold up better,” Rachel Lin, CEO and Co-Founder of SynFutures, told Decrypt. “Investors are likely reallocating rather than simply abandoning crypto entirely.”
The success of these products is building a new pipeline for institutional capital.
“The newly regulated pathways for institutional capital via ETF products are like pipes that connect the massive reservoir of TradFi to the digital asset ecosystem,” Alexis Sirkia, Chairman of Yellow Network, told Decrypt.
Is a Santa rally next for altcoins?
The odds of a Federal Reserve rate cut have shot up to around 70%, according to CME’s FedWatch tool over the weekend. Risk-on sentiment has improved, extending Bitcoin’s weekend bounce into the week, per a previous Decrypt report.
Sentiment around the prospects of a rate cut is reflected in prediction market Myriad, owned by Decrypt’s parent company Dastan, where users assign an 82% chance that the Fed would cut rates by a quarter point on December 10.
Still, the crypto market outlook remains delicate and heavily dependent on the Fed’s interest rate decision on December 10.
“With the increasing odds of a December rate cut, there is potential for liquidity to flow back into risk assets, including altcoins,” said Rachel Lin.
However, she tempered expectations, noting that any rally would be selective. “I would expect this rally, if it happens, to be selective rather than broad-based,” Lin noted. “Altcoins with strong structural stories and institutional access have a good chance of outperforming into December, but it’s not a guarantee of an across-the-board altseason.”
XRP is up 7.1% over the past 24 hours while Solana’s performance hovers slightly lower, around 5.2%, according to CoinGecko data.
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