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Crypto investment products recorded $1.73 billion in outflows last week, the largest weekly withdrawal since mid-November, as fading hopes for Federal Reserve rate cuts and weak price action prompted investors to pull money from Bitcoin and ether funds.
James Butterfill, head of research at CoinShares, said the scale of the Crypto etp outflow reflects a mix of monetary policy concerns and fading confidence in near-term price recovery.
“Dwindling expectations for interest rate cuts, negative price momentum and disappointment that digital assets have not participated in the debasement trade yet have likely fuelled these outflows,” Butterfill said in the report.
The reversal comes just one week after crypto funds attracted roughly $2.2 billion in inflows, underlining how fragile sentiment remains. Market participants have largely been stuck in a wait-and-see mode as digital assets continue trading sideways.
Bitcoin and Ether were responsible for the overwhelming majority of last week’s Crypto etp outflow, reinforcing their role as sentiment bellwethers for the broader market.
Bitcoin-linked investment products recorded approximately $1.09 billion in outflows, while Ether-based funds followed with $630 million in withdrawals. Combined, the two largest cryptocurrencies accounted for nearly the entire weekly capital exit.
The concentration of the Crypto etp outflow in Bitcoin and Ether suggests investors are reducing exposure to core holdings rather than rotating within the market.
Despite the broad risk-off mood driving the Crypto etp outflow, several altcoins posted divergent flows, pointing to selective positioning rather than a full market retreat.
Solana stood out with $17.1 million in inflows, indicating that some investors remain willing to back high-beta assets despite the broader downturn. Chainlink products also attracted modest inflows of $3.8 million.
By contrast, XRP and Sui saw continued pressure, with outflows of $18.2 million and $6 million respectively, according to CoinShares data.
The uneven performance across assets suggests that while the Crypto etp outflow is significant, it is not entirely indiscriminate.
One notable anomaly in the data was the behavior of short-Bitcoin products, which saw approximately $500,000 in inflows during the week.
Butterfill noted that the flows into bearish Bitcoin products indicate that sentiment has yet to recover meaningfully since the sharp market downturn in October 2025.
“Regardless, it indicates sentiment has still not improved since the Oct. 10, 2025 price crash,” Butterfill said.
The positioning further reinforces the cautious outlook reflected in the broader Crypto etp outflow.
The Crypto etp outflow was spread across most major fund providers, with the largest losses concentrated among U.S. issuers.
BlackRock’s iShares crypto ETFs recorded the heaviest withdrawals, totaling $951 million for the week. Fidelity Investments followed with $469 million in outflows, while Grayscale Investments saw $270 million exit its products.
Not all issuers were hit equally. Volatility Shares posted $83 million in inflows, while ProFunds Group attracted $37 million, showing that niche strategies continue to find buyers even as mainstream products struggle.
Regionally, the United States accounted for nearly the entire Crypto etp outflow, with $1.8 billion withdrawn from U.S.-listed products.
Europe and other regions saw comparatively limited activity, suggesting that U.S. monetary policy expectations remain the dominant driver of global crypto fund flows.
The concentration of the Crypto etp outflow in the U.S. highlights how sensitive digital asset investment vehicles remain to shifts in Federal Reserve outlook and macroeconomic data.
As a result of the sustained withdrawals, total assets under management (AUM) across crypto investment products fell to $178 billion, down from $193 billion at the end of the prior week.
The decline in AUM underscores the cumulative effect of the Crypto etp outflow and reflects the broader stagnation gripping digital asset markets.
While some investors continue to selectively deploy capital, the overall picture points to caution rather than conviction.
For now, the Crypto etp outflow serves as a reminder that institutional confidence remains fragile. Until clearer signals emerge on interest rates, inflation, or crypto’s role in global portfolios, flows are likely to remain volatile.
As Butterfill and other analysts have emphasized, sustained recovery will likely depend on a combination of macro clarity and renewed momentum — neither of which has yet materialized.
Until then, the Crypto etp outflow remains one of the clearest indicators of the market’s uneasy balance between long-term belief and short-term uncertainty.
