Crypto Funds Bleed $1.9B as Investor Confidence Wavers
Global digital asset products see fourth straight week of outflows, with Bitcoin and Ethereum funds hit hardest by the withdrawal.
Global cryptocurrency investment products suffered a staggering $1.94 billion in net outflows last week, marking the fourth consecutive week of withdrawals that signals a significant cooling of investor sentiment. The sustained capital flight, primarily from Bitcoin and Ethereum focused funds, underscores growing caution in a market that has otherwise seen a strong year-to-date performance.
The latest data, detailed in a weekly report from digital asset manager CoinShares, brings the total outflows over the past four weeks to a formidable $4.9 billion. This represents one of the most significant periods of sustained selling pressure on record, reflecting a decisive shift in sentiment among institutional and retail investors utilizing exchange-traded products (ETPs).
Bitcoin-centric funds bore the brunt of the withdrawals, shedding approximately $1.27 billion. Ethereum products were also heavily impacted, recording $589 million in outflows as investors pulled back from the two largest digital assets. The selling was geographically concentrated, with funds based in the United States accounting for $1.69 billion, or nearly 87%, of the total net withdrawals.
Adding another layer to the market's complexity, some traders are actively betting on further price declines. So-called 'short' Bitcoin products, which profit from a fall in the cryptocurrency's price, attracted $19 million in new capital. This indicates a segment of the market is positioning for continued downside or hedging existing long positions against volatility.
Despite the overwhelmingly bearish headline figure, the report offered a glimmer of nuance. CoinShares noted what it described as “tentative signs of a turnaround,” pointing to $258 million in inflows that materialized during the final trading days of the week. This late-week buying suggests that some investors may be viewing the price dip as a strategic entry point.
While Bitcoin and Ethereum funds faced a mass exodus, some alternative assets bucked the trend. Investment products tied to XRP, for instance, saw modest inflows of nearly $90 million, highlighting a selective and fragmented market landscape.
As the digital asset market navigates this period of uncertainty, investors will be closely watching whether the recent selling pressure continues to build or if the late-week dip-buying signals the beginning of a sentiment reversal. The sustained outflows represent a critical test of the market's resilience after a period of robust gains and renewed institutional interest.