Crypto investment products continued their sell-off last week as investor sentiment weakened, marking two consecutive weeks of outflows. Crypto exchange-traded products (ETPs) endured about $1.7 billion in redemptions, according to CoinShares, signaling continued risk-off behavior among seasoned holders and newer entrants alike. The rough two-week tally runs at about $3.43 billion, a figure that weighs on year-to-date performance and flushes out much of the early-year optimism that had followed the sector’s rebound. Analysts note a confluence of factors contributing to the softness, including a hawkish tilt from the U.S. Federal Reserve, persistent whale selling tied to a four-year cycle, and heightened geopolitical volatility that keeps investors cautious about downside risk. With asset managers under pressure to maintain liquidity, the pullback in crypto funds underscores how quickly sentiment can shift in a market still navigating macro headwinds.
Key takeaways
- Crypto ETPs saw $1.7 billion of outflows in the latest week, bringing two-week losses to roughly $3.43 billion and turning year-to-date flows negative by about $1 billion.
- Bitcoin led the retreat among crypto funds, with about $1.32 billion leaving BTC investment products, contributing to a year-to-date outflow of $733 million for the asset.
- Ether, Solana, and XRP also saw meaningful weekly redemptions, while short-Bitcoin products posted inflows of $14.5 million, signaling a mixed demand environment and continued bearish sentiment among risk assets.
- Issuer-level data showed BlackRock’s iShares ETFs suffering the largest outflows at around $1.2 billion, with Grayscale and Fidelity also exiting funds, though ProFunds Group and Volatility Shares countered by attracting inflows.
- Market momentum remained fragile as the Fear & Greed Index lurched into “Extreme Fear,” with Bitcoin hovering around the mid-$70s-thousands range and broader liquidity conditions tightening in the crypto space.
Tickers mentioned: $BTC, $ETH, $SOL, $XRP
Sentiment: Bearish
Price impact: Negative. Bitcoin traded around $77,610, down about 1.7% over the prior 24 hours, reflecting the broader pullback in crypto asset valuations.
Trading idea (Not Financial Advice): Hold. The current leg of outflows and price weakness suggests waiting for clearer catalysts before increasing exposure into broadly downbeat liquidity conditions.
Market context: The latest fund flows fit a pattern of risk-off behavior in crypto markets, where liquidity concerns and macro uncertainty are reframing the investment thesis for many participants. With ETF and ETP volumes acting as a barometer for institutional interest, persistent outflows point to ongoing recalibration rather than a flush of capitulatory selling. The situation is reinforced by external gauges of sentiment, including a widely watched Fear & Greed Index that currently signals high anxiety among market participants.
Why it matters
The persistence of outflows across crypto funds matters for several reasons. First, sustained redemptions compress liquidity in a market that already grapples with episodic volatility. For asset managers, lower AUM translates into higher relative tracking error and potential pressure to rebalance portfolios more aggressively as investors withdraw capital. In the latest week, total assets under management (AUM) in crypto funds fell to about $165.8 billion, a decline of roughly $73 billion since October of last year. This has rippled through the ecosystem, influencing how much capital is available to back new launches, rebalancing efforts, and the construction of diversified baskets that traders often rely on to manage risk.
Second, the outflows underscored a divergence in demand across the crypto spectrum. While BTC drew the lion’s share of withdrawals, other major assets were not spared from selling pressure. Ether faced notable weekly outflows as did Solana and XRP, illustrating a broad-based pullback that goes beyond a single-market driver. The contrast between broad-based declines in spot- and fund-embedded exposure and the modest inflows into short-Bitcoin products hints at a nuanced risk stance among traders: a preference for hedges against downside risk in the near term rather than outright directional bets on the long side.
From an issuer perspective, the headlines highlight a shift in the dynamics of ETF/ETP ownership. BlackRock’s iShares offerings again led the list of outflows, signaling that even the largest players are not immune to the risk-off mood. Grayscale Investments and Fidelity also registered sizable withdrawals, while ProFunds Group and Volatility Shares outperformed the broader trend by attracting inflows. The bifurcated resilience among niche providers underscores the diversity of strategies within the crypto fund universe, where some participants are experiencing liquidity stress while others test demand for volatility-based products or thematic exposures.
Notably, Hyperliquid (HYPE) emerged as a rare bright spot in this environment, benefiting from activity around tokenized precious metals. That such a niche product could outperform broader crypto funds during a general period of redemptions points to evolving investor preferences and the search for heterogeneous risk profiles within digital-asset channels. The broader takeaway is that while the core BTC/ETH exposures remain the anchor for many portfolios, specialized instruments continue to attract attention when macro conditions become unsettled.
The narrative around flows is inseparable from price action. In the near term, Bitcoin remains a focal point for traders, with the asset hovering in a tight range as outflows and macro headlines intersect. A weekend sell-off left price levels at a critical crossroads, and observers will be watching whether buyers return to support levels near the $75,000 mark or if additional short-term downside pressure drifts into the mid-$60,000s. The interplay between regulatory signals, macro policy expectations, and liquidity conditions will continue to shape how quickly funds reallocate away from weaker exposures toward safer havens or hedged strategies.
For market participants and researchers, the current cycle also provides a practical reminder of how sensitive crypto fund flows can be to macro cues. The fear embedded in the market is not merely about price fluctuations but about the capacity of the ecosystem to absorb large-scale redemptions without triggering cascading effects on liquidity and valuation. Investors and institutions alike are recalibrating their risk models to accommodate a slower pace of inflows, heightened volatility, and the potential for policy shifts that could influence capital allocations across crypto assets and related investment vehicles.
Looking ahead, the market will likely hinge on how quickly risk appetite returns and whether ETF/ETP issuers can restore confidence through product design, liquidity enhancements, and transparent disclosure around holdings and redemption liquidity. The latest data set, while negative in the near term, offers a granular lens on which assets and providers are more resilient in stress scenarios and which segments face persistent outflows as traders reposition in a changing macro backdrop.
What to watch next
- Next weekly flow report from CoinShares to determine whether outflows persist or reverse in the face of renewed demand.
- Bitcoin price action around critical support and resistance levels, particularly near $75,000 and $70,000, which could influence further fund flows.
- Regulatory developments and macro policy signals that could alter risk sentiment or ETF framework expectations.
- Performance of specialized issuers like ProFunds and Volatility Shares versus traditional players like BlackRock and Fidelity, as the flow divergence continues.
Sources & verification
- CoinShares weekly Digital Asset Fund Flows report (volume-271) – data and analysis on weekly ETP flows by asset and issuer.
- CoinTelegraph coverage of crypto ETP outflows and related market context (week prior to the reported period).
- Bitcoin price data and market references from CoinGecko.
- Crypto Fear & Greed Index reports from Alternative.me.
- Polymarket odds article on Bitcoin price scenarios referenced in the period.
Market reaction and liquidity dynamics in crypto funds
Crypto investment products continued to trim exposure as investors reassessed risk in a choppy macro landscape. The week’s outflows, totaling about $1.7 billion, followed a similar figure from the prior period and pushed the two-week total over $3.4 billion. The slump in assets under management (AUM) across the space underscores the broader retreat in crypto liquidity, with AUM slipping to about $165.8 billion—a reduction of roughly $73 billion since October 2025. The size of this pullback matters because it reduces the density of capital available to deploy into new products or to support modestly sized crypto ventures that rely on active inflows to maintain liquidity and tight trading spreads.
Bitcoin (CRYPTO: BTC) led the charge lower, with roughly $1.32 billion leaving BTC-focused funds, contributing to a year-to-date outflow figure that now stands near $733 million. Ether (CRYPTO: ETH) funds also faced notable redemptions, tallying $308 million for the week and driving annual losses to around $383 million. Other major assets, including Solana (CRYPTO: SOL) and XRP (CRYPTO: XRP), did not escape the downturn, registering $31.7 million and $43.7 million in weekly outflows respectively. Amid this backdrop, short-Bitcoin products drew inflows of about $14.5 million, signaling that some traders are positioning for near-term downside or reduced risk exposure rather than outright bullish bets. The split between long and short exposures illuminates a nuanced market where traders seek hedges against volatility rather than pure directional bets on spot prices.
Issuer dynamics added another layer of complexity. BlackRock’s iShares ETFs remained the largest exodus, with approximately $1.2 billion leaving the lineup. Grayscale Investments and Fidelity followed with significant outflows, while ProFunds Group and Volatility Shares bucked the trend by attracting inflows. The dispersion in issuer flows highlights how risk sentiment and product strategy intersect: cost, liquidity, and the perceived durability of a fund’s liquidity management framework can become decisive factors for both institutions and retail participants when volumes slip. In this environment, a few issuers with deeper liquidity and diversified product rosters may prove more resilient over time, even as others retreat from the space.
Hyperliquid (HYPE) stood out as a notable exception, benefiting from tokenized precious metals activity. Its relative resilience in a broad sell-off underscores investor appetite for non-traditional exposures within the crypto ecosystem, where tokenized assets and alternative strategies can offer a degree of diversification that traditional BTC/ETH products currently lack. The broader takeaway is that while the core narrative for crypto funds remains tethered to price cycles and macro policy expectations, there is growing demand for niche, innovative, and liquidity-focused vehicles that can weather periods of outsized redemptions.
As markets absorb the latest round of data, the cadence of inflows and outflows will likely continue to shape liquidity conditions and the price discovery process for crypto assets. Bitcoin, Ether, and other major coins remain under pressure in the short term, but the evolving landscape—where a handful of issuers push liquidity initiatives and alternative assets attract attention—could set the stage for a broader normalization should macro conditions improve. Investors should remain mindful of the fragility of weak liquidity environments, where even modest redemption pressure can amplify price moves and affect the ease with which new entrants can access the market.
