Crypto outflows hit a staggering $876 million last week, capping off a continuous streak of negative flows for the fourth consecutive week. This ongoing sell-off has culminated in total outflows of $4.75 billion in the past month, significantly trimming year-to-date inflows to $2.6 billion. Consequently, the total assets under management (AuM) have taken a hit, dropping by $39 billion from their peak, now resting at $142 billion—the lowest level seen since mid-November 2024.
The latest report from CoinShares reveals that US investors were the driving force behind the outflows, pulling out $922 million from digital asset investment products. This pessimistic sentiment in the US stood in contrast to other regions, where investors viewed the recent market downturn as a buying opportunity.
Bitcoin remained at the forefront of crypto outflows last week, with investors withdrawing $756 million from BTC investment products. Notably, short-Bitcoin products, aimed at profiting from price downturns, also experienced outflows of $19.8 million, the largest seen since December 2024. This suggests that some investors may be reaching a tipping point in their Bitcoin holdings, possibly closing their short positions amidst prevailing uncertainty.
Despite the significant outflows witnessed in recent weeks, the overall sentiment remains bearish, especially among US investors. If market conditions fail to improve, further outflows may be on the horizon, reinforcing the cautious stance among investors. The negative sentiment has spilled over to blockchain-related equity exchange-traded products (ETPs), with outflows amounting to $48 million during the same period, signaling a broader risk-averse approach among investors.
While assets like Solana (SOL) and XRP continue to attract inflows, the prevailing macroeconomic challenges are keeping the crypto market under pressure. The landscape is further complicated by the Federal Reserve's stance on monetary policy, which has influenced investor behavior amid concerns over inflation and interest rates.
As the market navigates through these turbulent times, it remains to be seen how investors and market participants will adapt to the evolving landscape, especially with the potential for further outflows looming in the near future.