Investor sentiment in the cryptocurrency market appears to be undergoing a discernible shift, moving away from the perceived safety of stablecoins towards a greater allocation in altcoins, particularly those demonstrating robust technological ecosystems and potential for higher returns. This recalibration of investment strategies, as highlighted by recent analysis from Bybit, suggests a growing appetite for assets beyond the established leaders of Bitcoin and Ethereum, driven by a search for yield and diversified growth opportunities.
Bybit’s latest report on investor asset allocation for the third quarter of 2025 reveals a significant trend: a notable reduction in the proportion of stablecoins held by investors, concurrently with an increased interest in alternative cryptocurrencies. This pivot indicates a strategic rebalancing within portfolios, as investors reassess their risk-reward profiles in a dynamic market environment.
While Bitcoin and Ethereum continue to represent substantial portions of investment portfolios, the data suggests that institutional investors are becoming key drivers of this migration from stablecoins. This trend is fueled by a desire to capitalize on the potential for greater appreciation in specific altcoin projects. The report indicates that for every dollar invested in Bitcoin, an additional three dollars are allocated across the broader portfolio. Ethereum’s share also saw a significant increase, growing by 20% compared to the previous reporting period. XRP has emerged as the third most significant cryptocurrency asset when excluding stablecoins.
The combined holdings of Bitcoin and Ethereum, excluding stablecoins, saw a marginal decrease from 58.8% in May 2025 to 55.7% in August 2025. This contraction is primarily attributed to the increasing allocation towards altcoins. The third quarter of 2025 witnessed a substantial redistribution of stablecoin volumes into assets like Solana, XRP, and other altcoins. Notably, Solana’s share reached its peak for the year, driven by investor expectations that treasury management strategies, previously applied to Bitcoin and Ethereum, will begin to extend to Solana.
The primary beneficiaries of this shift away from stablecoins appear to be tokens associated with decentralized exchanges (DEXs), followed by assets from Layer 1 and Layer 2 networks, and tokens backed by real-world assets. The report indicates that memecoins maintained a relatively stable volume, while the proportion of gold-backed cryptocurrencies remained minimal. Bybit’s analysis underscores a clear increase in investor engagement with altcoins, as their representation grows at the expense of stablecoin reserves.
Chris brings over six years of hands-on experience in cryptocurrency, bitcoin, business, and finance journalism. He’s known for clear, accurate reporting and insightful analysis that helps readers stay informed in fast-moving markets. When he’s off the clock, Chris enjoys researching emerging blockchain projects and mentoring new writers.