Ethereum Struggles With $352M Outflow – Solana and XRP Surge Ahead

Introduction

Ethereum investment products have recently faced intense selling pressure, recording over $352 million in outflows, signaling waning investor confidence in Ethereum-based funds. This sharp drop highlights growing concerns over the lack of staking yield in U.S.-listed Ethereum ETFs along with shifting market sentiment. In contrast, Solana (SOL) and XRP have emerged as standout performers, attracting capital inflows as traders seek alternative crypto assets with stronger narratives and momentum (CryptoSlate).

Despite Ethereum’s challenges, Solana continues to gain attention due to its strong on-chain activity, scalability, and increasing adoption across DeFi and NFT ecosystems. Investors are showing renewed interest in Solana’s ecosystem resilience and its potential to capture market share from more established blockchains. Similarly, XRP remains in the spotlight, with institutional products tied to XRP seeing inflows amid optimism about Ripple’s regulatory clarity and cross-border payment solutions. This shift hints at a growing diversification trend among crypto investors, moving away from Ethereum-dominated holdings.

The broader digital asset landscape reflects a divergence in sentiment: while Ethereum ETFs struggle with heavy withdrawals, alternative layer-1 blockchains like Solana and regulated tokens such as XRP are benefiting from speculative inflows and positive developments in their ecosystems. Analysts suggest that unless Ethereum’s ETF market regains traction or offers staking yields, more investors may continue reallocating funds toward networks with clearer value propositions. Overall, the $352 million Ethereum outflow underscores a critical moment for the crypto sector, where shifting capital flows highlight how Solana, XRP, and next-generation blockchains are stepping into the spotlight.

Background

Digital-asset investment products saw a net $352 million leave the market last week, and almost all of it came from Ethereum-linked funds. According to the weekly CoinShares report, Ethereum products bled $912 million, while Bitcoin attracted $524 million and alt-coins such as Solana and XRP enjoyed fresh inflows — marking Solana’s 21st consecutive week in the green. The shift underscores a larger trend in crypto markets: capital is rotating away from the second-largest blockchain toward faster or more regulated alternatives.

Why so much money is leaving Ethereum

An “outflow” simply means investors are redeeming shares in exchange-traded products (ETPs) that track a token. Ethereum’s outflows have several drivers. First, U.S. spot Ether ETFs do not pay a staking yield, so holders miss out on the 3–4 percent annual return they could earn by staking native ETH on-chain. Second, macro uncertainty and softer price action have pushed some traders to lock in gains after Ethereum’s strong summer rally. Finally, newer layer-1 networks promise lower fees and higher throughput, making ETH look less compelling in the short run.

Why Solana and XRP are attracting cash

While Ethereum products leaked value, Solana and XRP funds quietly drew in US $16 million and US $9 million, respectively, during the same week. Solana benefits from its speed (65k+ transactions per second), an expanding DeFi ecosystem, and optimism around a potential U.S. Solana ETP. XRP, meanwhile, is buoyed by Ripple’s partial court victory over the U.S. SEC in 2024 and growing adoption of its cross-border payment rails. Together, the two assets illustrate how investors are diversifying into blockchains that either solve scalability (Solana) or regulatory (XRP) pain points.

Key terms and concepts explained

 • Digital-asset ETPs/ETFs: Exchange-traded products that hold or track crypto; investors buy shares instead of the tokens themselves.

 • Inflows vs. outflows: Net cash entering or leaving an investment product; a proxy for bullish or bearish sentiment.

 • Staking yield: Rewards earned for locking ETH to secure the network. Spot ETFs can’t stake customer assets under current rules, so the yield disappears.

 • Layer-1 blockchain: A stand-alone base network such as Bitcoin, Ethereum, or Solana. Faster layer-1s aim to fix congestion and high fees seen on older chains.

What to watch next

If Ethereum ETFs eventually enable staking or if the protocol’s next upgrade meaningfully boosts throughput, outflows could reverse. Until then, analysts at CoinShares note that “sentiment is polarised” between jurisdictions: U.S. investors led last week’s redemptions while Germany and Hong Kong posted modest inflows. In the meantime, rising alt-coin inflows show that capital isn’t leaving crypto outright; it’s searching for higher potential returns and clearer regulatory lanes.