Digital asset investment products experienced significant crypto outflows totaling $508 million last week, according to the latest CoinShares report.
This marks the second consecutive week of negative flows, bringing the two-week total to $924 million. The pullback follows an impressive 18-week streak that had generated $29 billion in inflows.
Bitcoin bore the brunt of investor caution, accounting for $571 million in outflows. Some investors even added to short positions, with short-Bitcoin products seeing $2.8 million in inflows.
Why Crypto Outflows Are Happening Now
Several factors are driving the current exodus from crypto funds:
- Political uncertainty: Investor caution following the US Presidential inauguration and concerns about potential trade tariffs
- Economic concerns: Growing uncertainty around inflation and monetary policy direction
- Recent market events: The double impact of the LIBRA scam and Bybit hack has damaged investor confidence temporarily
- US economic slowdown: Last week’s US Services PMI release showed the lowest reading in 22 months, suggesting GDP growth of only 0.6%
Trading volume has also declined substantially, falling from $22 billion two weeks ago to just $13 billion last week.
Regionally, the outflows were concentrated in the US market, which recorded $560 million in withdrawals. In contrast, European markets showed continued confidence, with Germany and Switzerland recording inflows of $30.5 million and $15.8 million, respectively.
The Ethereum ETF market wasn’t spared either, seeing $78 million in outflows, bringing its three-day outflow streak to $100 million.
Despite these recent setbacks, the total cumulative inflows into Bitcoin funds remain impressive at over $39 billion, with assets under management across spot ETFs totaling $111 billion.
Altcoins showed surprising resilience amid the broader market retreat. XRP led with inflows of $38.3 million, bringing its total inflows since mid-November to $819 million. Investors remain optimistic that the SEC will drop its lawsuit against Ripple.
Other altcoins also saw positive flows, with Solana, Ethereum, and Sui recording inflows of $8.9 million, $3.7 million, and $1.47 million, respectively.
The crypto market as a whole has seen significant price declines, with Bitcoin bottoming at $85,930 and Ethereum falling to a low of $2,330 over the past 24 hours.
Despite the current negative sentiment, some analysts maintain a bullish long-term outlook, suggesting that delays in potential state and national Bitcoin strategic reserves under the Trump administration present accumulation opportunities for forward-thinking investors.
