Crypto Outflows Surge $1.7B Amid Hawkish Fed, Whale Selling

• Bitcoin and Ethereum led $1.7B crypto fund outflows, signalling growing investor caution and market pressure.

• US spot Bitcoin ETFs lost $2.8B in two weeks, yet long-term holders continue to maintain positions.

• Hype products, like tokenised precious metals, attracted $15.5M inflows, showing niche investor interest.

Digital asset investment products faced a sharp outflow of $1.7 billion last week, signalling growing caution among investors. According to CoinShares, the withdrawals have reversed year-to-date inflows, leaving a global net outflow of $1 billion.

The decline comes as the US Federal Reserve adopts a more hawkish stance, while large holders, or “whales,” continue selling amid the four-year market cycle. Additionally, heightened geopolitical risks have compounded negative sentiment.

As per the report, since October 2025 highs, total assets under management in digital asset products have fallen by $73 billion. The U.S. led the decline in digital asset funds, accounting for $1.65 billion. In addition, Canada and Sweden also reported negative flows of $37.3 million and $18.9 million, respectively. However, Switzerland and Germany reported small positive flows of $11 million and $4.3 million, respectively.

Bitcoin and Ethereum Bear the Brunt

Bitcoin faced the largest outflows, totalling $1.32 billion, while Ethereum saw $308 million exit. Other recent favourites, such as XRP and Solana, also experienced withdrawals of $43.7 million and $31.7 million. Short Bitcoin products, conversely, attracted $14.5 million in inflows, pushing year-to-date AuM up by 8.1%. Besides the broader market, US spot Bitcoin ETFs recorded $2.8 billion in redemptions over the past two weeks, with $1.49 billion leaving last week alone.

Despite heavy withdrawals, institutional investors appear to maintain positions better than market movements suggest. Total AuM for spot Bitcoin ETFs has fallen roughly 31.5% from October’s peak of $165 billion. Bitcoin’s price dropped nearly 40% over the same period. However, cumulative ETF inflows remain only about 12% below their peak, indicating limited capitulation by longer-term holders.

Hype investment products have bucked the trend by attracting investments worth $15.5 million. The gains recorded can be attributed to the recent on-chain activity in tokenized precious metals. The gains also show that investors are interested in other crypto assets apart from Bitcoin and Ethereum. Therefore, it is evident that while traditional crypto assets are facing a decline, specific crypto investment products are gaining traction.