Quick Breakdown:
- Stablecoin holdings plunged from 42.7% to 25% in Q3 2025, with institutions cutting deepest at just 17.2% exposure.
- Capital rotated into altcoins, with DEX tokens quadrupling and Layer 2 assets nearly tripling in portfolio share.
- Solana (SOL) hit its peak 2025 allocation, while XRP climbed to the third-largest non-stablecoin asset.
Crypto investors significantly reduced their stablecoin holdings in the third quarter of 2025, reallocating capital toward Solana (SOL), XRP, and other altcoins, according to Bybit’s latest asset allocation report.
— Bybit (@Bybit_Official) September 19, 2025
Stablecoin reserves decline sharply
Stablecoin holdings, which made up 42.7% of investor portfolios in April, fell to just 25% by August. The 20% drop marked one of the steepest quarterly declines to date. While only 4% of that capital flowed into Bitcoin and Ether, the bulk was redirected into altcoins across multiple categories.
Institutions appear to be leading this shift. Their stablecoin levels dropped to 17.2% by August, compared to 55.7% for retail investors. Bybit attributes the move to market confidence sparked by treasury strategies and whale accumulation of spot ETFs. Institutional investors, described as more “return-sensitive,” have been at the forefront of deploying cash reserves into higher-risk, higher-return assets.
Altcoin categories see strong gains
Among altcoins, decentralized exchange (DEX) tokens were the biggest winners. Their share of investor holdings quadrupled from 0.4% in June to 1.8% in August, driven largely by institutional inflows. Layer 2 tokens followed, nearly tripling from 0.8% to 2.1% over the same period.
Solana surged to its highest portfolio levels of 2025, as investors speculated that institutional treasury strategies seen with Bitcoin and Ether could extend to SOL. XRP also climbed to become the third-largest non-stablecoin crypto asset, solidifying its position among top-tier tokens.
Despite gold’s rally in traditional markets, gold-backed crypto assets remain a minor presence, while meme tokens showed little change in investor allocation.
Bybit’s data confirms that Bitcoin still dominates overall holdings at 31.7%, up slightly from 31.0% in May, while Ether staged a strong rebound with a 20% rise in portfolio share. But the sharp decline in stablecoin reserves highlights a broader rotation into risk assets, positioning altcoins as key beneficiaries of Q3’s capital shift.
Bybit and Block Scholes’ derivatives report added that while Bitcoin and Ether remain rangebound with bearish options sentiment, altcoins continue to show resilience against weak macroeconomic signals.
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