TL;DR
- Market Outflows: Digital asset products saw $1.7 billion in weekly withdrawals, pushing global YTD flows to a $1 billion outflow as sentiment weakened amid a hawkish Federal Reserve outlook and whale selling.
- Asset and Regional Impact: Bitcoin led with $1.32 billion in outflows, while the US recorded $1.65 billion in regional withdrawals; Switzerland and Germany saw small inflows.
- ETF Stress: US spot Bitcoin ETFs faced $2.8 billion in redemptions over two weeks, with most holdings now below cost basis, though cumulative inflows remain only 12% off their peak.
Digital asset investment products faced a second consecutive week of heavy withdrawals, with a combined $1.7 billion exiting the market and fully reversing earlier year-to-date inflows. The shift has pushed global flows to a $1 billion outflow, underscoring a sharp deterioration in sentiment as investors react to a more hawkish Federal Reserve outlook, continued whale distribution tied to the four-year cycle, and rising geopolitical uncertainty. Since the October 2025 price peak, total digital assets under management have fallen by roughly $73 billion, highlighting the scale of the pullback across the sector.
Regional Outflows Concentrated in the US
The United States accounted for the overwhelming majority of last week’s digital asset withdrawals, recording $1.65 billion in outflows from US-listed products. Canada and Sweden also saw notable declines, with $37.3 million and $18.9 million leaving their respective markets. In contrast, Switzerland and Germany posted modest inflows of $11 million and $4.3 million, offering a small counterbalance to the broader negative trend. The regional divergence reflects varying levels of investor caution, though the overall picture remains decisively risk-off.
Negative sentiment extended across nearly all major digital assets. Bitcoin products led the downturn with $1.32 billion in outflows, while Ethereum saw $308 million withdrawn. Previously favored tokens were not spared, as XRP and Solana recorded outflows of $43.7 million and $31.7 million. Short Bitcoin products were the lone standout, attracting $14.5 million in inflows and posting an 8.1% rise in assets under management year to date, signaling increased demand for downside hedging.
ETF Pressure Builds as Bitcoin Trades Below Cost Basis
U.S.-listed spot Bitcoin ETFs have come under mounting pressure after posting their second- and third-largest weekly outflows on record last month. With roughly $113 billion in assets and 1.28 million BTC held, the average ETF purchase price sits near $87,830 per coin, placing most positions underwater at current market levels. The 11 US spot ETFs have seen $2.8 billion in redemptions over the past two weeks, including $1.49 billion last week alone.
Despite the accelerating withdrawals, institutional investors appear more resilient than price action suggests. Total ETF assets have fallen 31.5% from their October peak, while Bitcoin’s price is down nearly 40%. Yet cumulative ETF inflows remain only 12% below their high, indicating limited capitulation even as hype-focused products attracted $15.5 million in inflows driven by tokenized precious metals activity.
