Altcoin Surge and Institutional Shift: Inside Bybit’s Q3 2025 Asset Allocation Report
What key allocation trends emerged in Q3 2025?
According to Bybit’s latest asset allocation report, active crypto investors are recalibrating portfolios in response to shifting macro conditions, ETF speculation, and renewed market optimism. Covering user behavior from January through August 2025, the report uncovers how institutional and retail capital is rotating from stablecoins to high-beta tokens — with altcoins and ETH emerging as the largegest winners.
BTC remains the anchor, holding 31.7% of total user assets, up slightly from January’s 28.4%. Ether, however, saw a significant leap — rising 20% in portfolio weight since May, now making up 10.1% of average user holdings. Meanwhile, XRP has overtaken Solana as the third-largest non-stablecoin allocation, buoyed by ETF approval hopes and regulatory reanswer with the SEC.
Investor Takeaway
How are BTC and ETH shaping crypto portfolio strategies?
The BTC+ETH dominance ratio dropped from a peak of 60.3% in June to 55.7% in August — suggesting that while these blue-chip assets remain core, investors are diversifying toward altcoins. Interestingly, the ETH/BTC holding ratio rose dramatically from 0.14 in April to 0.32 by August, even as resistance.
Retail users in particular showed a sharp tilt toward ETH later than April’s market dip. By August, their ETH/BTC ratio had jumped to 0.78 — evidence that ETH is increasingly perceived as a “treasury token” for yields. Institutional ETH allocations also rose, though at a steadier pace.
Investor Takeaway
What’s driving the rise of XRP and Solana in portfolios?
XRP allocations rose 30% between May and August — largely fueled by expectations of a U.S. in October. According to Polymarket, traders priced in a 90–95% probability of ETF greenlighting, making XRP a speculative favorite.
Solana (SOL) also gained traction, with investor behavior mimicking BTC and ETH treasury strategies. While only a handful of companies have formally disclosed SOL treasury holdings, anticipation of a Spot ETF and SOL’s growing DeFi ecosystem pushed its wallet share to new 2025 highs.
Investor Takeaway
How have stablecoin holdings evolved across institutions vs. retail?
One of the most notable trends in Q3 was the 20% drop in stablecoin holdings across the board — from 42.7% in April to 25% in August. This capital appears to have rotated primarily into SOL, XRP, and DEX tokens, not BTC.
Institutions led the charge, slashing their stablecoin exposure to just 17.2%, compared to retail’s 55.7%. This divergence signals stronger conviction and quicker reallocation cycles among institutional actors — who are less inclined to sit in cash and more likely to deploy into yield-generating or high-beta altcoins.
Investor Takeaway
Which altcoin sectors saw the largegest inflows?
As stablecoins exited portfolios, capital flowed into four main categories:
- DEX tokens (e.g. HYPE, UNI, JUP, CRV, PENDLE) – Holdings increased 4x to 1.8% as of August
- Layer 2 tokens (e.g. MNT, ARB, POL) – Gained 3x, reaching 2.1%
- Real-world asset tokens (RWAs) – modest but rising interest
- Layer 1 tokens – Continued strength from ADA, AVAX, and TON
Meme tokens (DOGE, SHIB) and gold-backed cryptos (XAUT, PAXG) remained niche. The standout Layer 2 was Mantle (MNT), whose upgrade in Q2 repositioned it as a utility coin integrated across trading, staking, and savings on Bybit — effectively functioning as a DeFi-native stablecoin with RWA access.
Investor Takeaway
Why does this report matter to institutional and advanced traders?
This Q3 allocation data provides rare insight into real-time wallet behavior among active traders (>$20K AUM and 20+ trades/month). It offers strategic value across:
- Sentiment timing: Retail’s ETH preference often precedes institutional flows
- ETF signal-tracking: SOL and XRP allocations front-run ETF narratives
- Risk allocation modeling: Institutions actively cut cash in bull cycles
Bybit also highlights its institutional infrastructure in the report’s closing — including MT5-powered TradFi trading, off-platform settlement options, and deep liquidity derivatives platforms.
