XRP and Altcoins Surge as Investors Dump Stablecoins: Bybit’s Q3 2025 Report Reveals Major Shift

Stablecoin exodus fuels altseason rally as traders chase real returns.

Market Rotation Accelerates

Bybit's latest data shows investors abandoning stablecoin safety nets—pouring billions into XRP and alternative cryptocurrencies. The flight from dollar-pegged assets signals growing risk appetite amid evolving regulatory clarity.

Liquidity Tsunami Hits Altcoins

XRP leads the charge with double-digit weekly gains as institutional money seeks exposure beyond Bitcoin. Mid-cap tokens outperform majors—defi protocols and layer-1 networks capture the lion's share of diverted stablecoin liquidity.

Traders Bet Against Fiat

The stablecoin drain reveals deepening distrust in traditional finance's 'safe' options. Why park cash at 0% when alts deliver 20% weekly moves? Even yield-hungry institutions now bypass Treasury bonds for crypto-native strategies.

Watch the dominoes fall—traditional finance's loss becomes crypto's gain, yet again.

Investors Dump Stablecoins For Altcoins

According to Bybit, the stablecoin holding percentage of crypto investors dropped from 42.7% in April and 35.42% in June to just 25% in August. This 20% decline has mostly benefited altcoins, with only a little of the holdings (4%) allocated to BTC and ether (ETH).

The crypto exchange noted that institutions have been cutting their stablecoin holding percentage more than retail traders in Q3 2025. With more return-sensitive strategies, these crypto-friendly entities have slashed their stablecoin holdings to 17.2%, while retail traders hold roughly 55.7%.

Bitcoin was the largest single asset held by all crypto users in August. The coin accounted for 31.7% of investors’ total assets, an uptick from 28.4% in January. However, the holding percentage for BTC has remained relatively stable since May, when it accounted for 31% of assets.

ETH, on the other hand, successfully recovered with a 20% increase in its holding percentage since Bybit’s last asset allocation report in the second quarter of this year. The figure ROSE from 8.4% in May to 10.1% in August. Bybit attributed this growth to investors deploying stablecoin reserves in their wallets, instead of reallocating from other major tokens.

DEX Tokens Emerge as Highest Beneficiaries

Although solana holdings have surged to their highest levels this year and XRP is now the third-largest non-stablecoin crypto asset, they have not benefited the most from investors redeploying their stablecoin allocations.

DEX tokens are the largest beneficiaries, increasing by 4x from 0.4% in June to 1.8% in August. This growth is linked to institutions deploying huge capital into this sector and increasing their holding percentage by 7x within the same time frame.

Layer-2 assets followed suit, with their holding percentage increasing almost threefold from 0.8% in June to 2.1% in August. Real World Assets (RWA) also experienced a significant impact, while meme coins and Gold tokens remained largely unchanged.