Identifying the Best Altcoin ETFs to Buy During a Market Downturn

The crypto market's volatility has long been a double-edged sword for investors. While downturns often trigger panic, they also present opportunities to capitalize on undervalued assets-particularly when institutional-grade exposure is available through regulated vehicles like ETFs. In 2025, XRP, the third-largest non-stablecoin cryptocurrency by market capitalization ($127.3 billion), has emerged as a compelling case study for altcoin ETFs that thrive during market corrections according to analysis. This analysis explores how institutional-grade XRP ETFs, such as those from Bitwise and Canary Capital, are reshaping the landscape for investors seeking resilience in turbulent crypto cycles.

XRP's Institutional Appeal: A Foundation for ETF Growth

XRP's unique value proposition-low-cost, high-throughput transactions and a robust institutional infrastructure-has made it a magnet for ETF innovation. According to a report by , Bitwise's spot XRP ETF (ticker: XRP) launched in late 2025 with a 0.34% management fee waived for the first month on the first $500 million in assets. This move followed Canary Capital's XRPC ETF, which had already attracted $276.8 million in net inflows since its debut according to data. Both funds leverage XRP's operational maturity, which includes partnerships with financial institutions and a well-established blockchain network, to offer investors a regulated, liquid alternative to speculative altcoins.

Performance During Downturns: XRP ETFs Outshine Bitcoin and Ethereum

The true test of any ETF's resilience lies in its performance during market stress. In November 2025, as the broader crypto market dipped by nearly 4% to a $3.2 trillion market cap, XRP ETFs defied the trend. Canary Capital's XRPC ETF, for instance, recorded $245 million in net inflows on its first day of trading and continued to accumulate $15.82 million in inflows over the next three days according to reports. By contrast, Bitcoin and Ethereum ETFs faced outflows, underscoring a shift in investor preference toward altcoins with tangible use cases as stated in analysis.

This divergence is not coincidental. XRP's utility in cross-border payments and its relatively stable supply dynamics position it as a hedge against the speculative volatility of other cryptocurrencies. notes, the XRPC ETF's inflows during this period represented over 138 million XRP tokens, signaling strong demand that could theoretically support XRP's price if more ETFs launch.

Bitwise's XRP ETF: A Strategic Play for Institutional Investors

Bitwise's entry into the XRP ETF space further validates the asset's institutional credibility. The fund's fee waiver for the first $500 million in assets is a calculated move to attract both retail and institutional capital. While the ETF's performance during the November 2025 downturn remains nascent, its launch coincided with a broader rush of altcoin fund innovations, driven by updated SEC guidance. This regulatory clarity has reduced friction for investors wary of compliance risks, making XRP ETFs an attractive alternative to direct crypto holdings.

Cautionary Notes: Not All XRP ETFs Are Created Equal

While most XRP ETFs have shown resilience, exceptions highlight the importance of due diligence. The Volatility Shares XRP ETF (XRPI), for example, saw its price drop 7.8% on its debut amid a 5.2% decline in XRP's price according to financial reports. Despite strong initial demand, the fund failed to translate inflows into price appreciation, underscoring the risks of leveraged or inverse products during volatile periods as reported by analysts. This contrast reinforces the need for investors to prioritize ETFs with straightforward exposure and low fees, such as Bitwise's and Canary Capital's offerings.

The Road Ahead: XRP ETFs as a Correction-Resilient Strategy

As the crypto market matures, altcoin ETFs with institutional-grade exposure are likely to play a pivotal role in stabilizing investor portfolios during downturns. XRP's combination of utility, regulatory progress, and ETF-driven demand creates a compelling case for inclusion in a diversified crypto strategy. However, investors must remain vigilant about market conditions and fund-specific risks. For now, the data suggests that XRP ETFs-particularly those with low fees and strong inflow trends-are well-positioned to weather the storms of 2025 and beyond.