Institutions Rewire Portfolios as Altcoins Outpace Bitcoin in Q3 Bybit Surge

The Q3 2025 Bybit Asset Allocation Report highlights a significant shift in the cryptocurrency market, with altcoins gaining momentum as institutional investors reallocate capital away from Bitcoin (BTC) and toward alternative digital assets. The report, released in mid-October 2025, indicates that altcoins collectively accounted for 52% of the total trading volume on Bybit in the third quarter, a notable increase from the 44% recorded in the previous quarter. This trend suggests growing confidence in the broader crypto ecosystem beyond the dominance of BTC.

Among the top-performing altcoins, Solana (SOL), Cardano (ADA), and Avalanche (AVAX) led the volume rankings, with SOL alone contributing nearly 18% of the quarter's altcoin trading volume. Analysts attribute this performance to a combination of improved network activity, developer activity, and increasing adoption of decentralized applications (DApps) on these platforms. Additionally, the rise in institutional interest has been supported by enhanced regulatory clarity in several major markets, particularly in the European Union and the United States.

The report also notes a shift in asset allocation patterns among institutional clients on Bybit. Approximately 37% of institutional clients increased their exposure to altcoins between June and September 2025, while only 12% increased their BTC holdings during the same period. This strategic move reflects a broader diversification strategy, with institutions seeking to mitigate risks tied to Bitcoin’s volatility while capitalizing on emerging opportunities in the altcoin space.

Bybit’s Q3 report further reveals that total assets under management (AUM) on the platform grew by 23% quarter-over-quarter, reaching $27.4 billion by the end of September 2025. Of this, altcoin-related assets represented 36% of the AUM, up from 28% in Q2. The firm attributes this growth to the integration of new altcoin futures and options products, which have attracted a wider range of institutional and high-net-worth investors.

Market analysts have noted that the increased participation of institutional players in altcoin markets has led to improved liquidity and reduced price volatility in certain segments. For example, the average 24-hour volatility for altcoins like XRP and DOT decreased by 12% in Q3 compared to the previous quarter. This trend supports the view that institutional involvement is contributing to the maturation of the altcoin market, making it more attractive to a broader investor base.

The Bybit report concludes with a cautious outlook, emphasizing that while altcoins are currently outperforming BTC in terms of trading volume and institutional interest, the overall market remains subject to macroeconomic and regulatory shifts. As such, the firm advises investors to maintain a balanced portfolio and closely monitor developments in policy and market sentiment.