Crypto ETFs Were Hit Hard in May. Altcoins Had Other Plans

Asset Flows and Composition

Redemptions were concentrated in the two dominant categories, even as the divergence across the asset universe widened.

Bitcoin-linked ETFs recorded net outflows of $2.21B, reversing $1.52B of inflows in April, while total AUM fell to $113.7B from $128.1B. The redemptions were concentrated in the largest funds, with the iShares Bitcoin Trust (IBIT) alone accounting for $1.31B, though Bitcoin retained its position as the core holding of the US crypto ETF market.

Ethereum-linked ETFs saw $523.9M in net outflows, closing at $15.2B in AUM and ending a two-month run of inflows that had reached $150.9M in April. The iShares Ethereum Trust (ETHA) led with $423.8M in redemptions, and ETH outflows again exceeded BTC on a flow-relative-to-AUM basis.

Multi-asset products recorded $11.1M in net outflows (AUM: $2.30B), slipping back into redemptions after a modest $1.2M inflow in April.

Altcoin-linked products were the clear counterpoint. XRP-linked ETFs attracted $141.9M, a sharp acceleration from $32.5M in April (AUM: $2.47B), while Solana-linked ETFs drew $109.6M, a fourth consecutive month of inflows (AUM: $2.38B). New and recently launched vehicles drove much of the gain, from Franklin's XRPZ ($38.7M) and Bitwise's XRP fund ($35.1M) to the Bitwise Solana Staking ETF ($79.3M) and the Fidelity Solana Fund ($26.9M).

The clearest sign of that broadening was Hyperliquid, a category that did not exist at the start of the year. US-listed Hyperliquid products drew roughly $115.9M in combined net inflows, closing at about $139.9M in AUM, led by the Bitwise Hyperliquid ETF (BHYP, $62.0M) and the 21Shares Hyperliquid ETF (THYP, $49.7M), both among the month's largest gainers. Their combined haul rivalled inflows into established altcoins such as Solana.

Fund-Level Activity

At the fund level, May's largest gainers were almost exclusively income, staking, leveraged and newly launched products, reflecting yield-seeking and tactical positioning rather than strategic allocation into spot. The NEOS Bitcoin High Income ETF (BTCI) led all funds with $141.8M, up from $48.5M in April (AUM: $1.24B), followed by the Bitwise Solana Staking ETF (BSOL, $79.3M), the Morgan Stanley Bitcoin Trust (MSBT, $73.9M) and the Bitwise Hyperliquid ETF (BHYP, $62.0M).

The largest funds by AUM were unchanged. The iShares Bitcoin Trust (IBIT) anchored the market at $58.1B, down from $65.8B in April, followed by the Fidelity Wise Origin Bitcoin Fund (FBTC) at $13.4B and GBTC at $10.75B.

The outflows reversed April's leadership: IBIT, FBTC and ARKB, which led April's inflows, were among May's largest redeemers, with IBIT shedding $1.31B, the Grayscale Bitcoin Trust (GBTC) $328.0M and the ARK 21Shares Bitcoin ETF (ARKB) $313.5M. Investors appear to have trimmed plain-vanilla spot exposure in favour of yield, leverage and thematic products rather than exiting the asset class.

American Dominance

US-listed products continued to dominate the global crypto ETF market in May. Despite net outflows of $2.37B, American-domiciled ETFs closed the month with $119.2B in AUM, retaining roughly 84.5% of the $141.1B global market, broadly in line with April's 85.1%.

Outside the US, the picture was steadier but no longer additive. Switzerland ($56.0M), Jersey ($38.6M) and Canada ($19.1M) drew inflows, yet Europe as a whole slipped to roughly $15M of net outflows, extending a cooling already visible in April. The steadiness of non-US flows during a near-$2.4B month of US redemptions nonetheless echoes the geographic divergence seen earlier in the year.

Outlook

On the surface, May reads as a clean continuation of risk-off. The near-$2.4B of US outflows reversed two consecutive months of inflows, marked the largest monthly redemption of the year, and saw the biggest Bitcoin and Ether funds lead the retreat as prices fell.

Beneath the headline, the composition was more differentiated. The redemptions were overwhelmingly a large-cap, single-asset phenomenon, even as income, staking and altcoin products drew capital: XRP and Solana extended their inflows, Hyperliquid emerged as a new category, and the broad CD20 fell far less than the large-cap CD5 and Bitcoin. That breadth has however not prevented further downside. May proved no trough: by early June, Bitcoin had fallen to around $62,000 and the major indices were down a further 15% or more, leaving the redemption pressure that defined May firmly in place.

Data Sources: 

TrackInsight (All ETF and ETP Data): https://www.trackinsight.com/services/data-services 

CoinDesk (XBX, CD20, CD80, Centralised Exchange Data): https://indices.coindesk.com/indices; https://www.coindesk.com/price

Disclaimer: Trackinsight considers flows from an ETF's perspective, treating the fund's first AUM upon listing as its initial inflow, which may differ from other sources that account for pre-listing activity or conversions.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.