Stablecoin holdings plunge in Q3 as investors pile into SOL, XRP, altcoins: Bybit

Contrary to the trend, there has been a sharp drop in Stablecoin holdings in the July-September quarter as Stablecoins were significantly reallocated to SOL, XRP, and other altcoins, according to a latest quarterly report by Bybit, the world’s second-largest cryptocurrency exchange by trading volume. 

During the data period of this report, stablecoin holding percentage has decreased sharply from 42.7% in April 2025 and 35.42% in June 2025 to only 25.0% in August 2025, the company said in its report, adding that the drop of more than 20% largely benefited altcoins. “Investors still hold $1 in Bitcoin for every $3 of crypto holdings overall; Ether holdings rose 20% since the last report; XRP is now the third-largest non-stablecoin crypto asset.”

Bybit’s Q3 2025 report underscores investors’ growing appetite for altcoins as stablecoin reserves are redeployed into higher-growth assets. The Bybit data shows that only 4% of its Stablecoin holdings were allocated to BTC and ETH, as the rest goes to altcoins, with all different categories of tokens witnessing the rally. BTC and ETH concentration have trimmed from 58.8% of non-stablecoin tokens in May 2025 to 55.7% in August 2025, propelled mainly by higher allocation to altcoins.

Solana holdings, however, reached their highest level this year as investors anticipate that treasury strategies applied to BTC and ETH will extend to SOL. However, decentralised exchange tokens were the largest beneficiaries of falling stablecoin levels, followed by Layer 1, Layer 2, and real-world asset tokens. The Bybit report adds that meme tokens barely moved during Q3, while gold tokens remain a minority.

Interestingly, institutions are more return-sensitive with clearly lower cash levels. As of August 2025, they hold only 17.2%, while retail traders hold a whopping 55.7% of their portfolios in stablecoins. 

"Institutions seem to be making a smart move by cutting their stablecoin holding percentage in half, stepping into Q3 2025, which aligns with the market rally stemming from both the treasury strategies of institutions and whale accumulation of spot ETFs."

Among altcoins, DEX token-holding percentage increased 4x for Bybit, from only 0.4% in June 2025 to 1.8% in August 2025, becoming the best-performing category in Q3 2025. Bybit has attributed the increase to a huge deployment of capital into this category by institutional investors, which increased the percentage of holdings by 7x during the same period.

Layer 2 tokens are the second-largest beneficiary from the Stablecoin exit movement, with their percentage-holding surging by almost 3x from 0.8% in June 2025 to 2.1% in August 2025. “Gold’s price keeps pushing to new highs in traditional finance, yet gold crypto’s presence in investors’ whole portfolios is still barely noticeable,” says the report.