Investment products linked to crypto assets saw ongoing outflows last week, continuing a recent trend. According to data from CoinShares, there was a withdrawal of $1.67 billion from crypto exchange-traded products (ETPs). This brought total outflows over the past three weeks to $4.21 billion. Assets under management (AUM) dropped to $141 billion, the lowest level since early April.
Bitcoin leads outflow trend
The majority of last week’s withdrawals came from Bitcoin-focused ETPs. These products saw an outflow of $1.44 billion—a record weekly reduction for this year. Over the past month, total losses from Bitcoin funds reached $2.4 billion. However, since the start of 2024, the total net inflow remains just $1.2 billion. Bitcoin ETPs now hold $114.6 billion in managed assets.
Mini glossary: ETP stands for exchange-traded product, a broad category of investment vehicles traded on exchanges. ETF is the best-known subtype. Crypto ETPs allow investors exposure to price movements without holding the actual asset.
CoinShares’ Head of Research, James Butterfill, attributed the acceleration in outflows to investors moving away from risk due to tensions linked to Iran. Butterfill added that the CLARITY Act process in the US has had only limited positive effects, insufficient to counter this wave of withdrawals.
James Butterfill noted that the latest numbers resemble the five-week stretch of uninterrupted negative flows seen in January and February, highlighting a renewed move away from risk in the market.
Weak sentiment extends to Ether and altcoins
Ether funds also continued to see strong selling pressure. Last week, outflows from ETH products totaled $257.3 million, bringing year-to-date losses for Ether to $346 million.
Participation on the altcoin side was notably weak. According to CoinShares, the number of altcoins seeing over $1 million in inflows dropped from nine the previous week to just five. On the positive side, XRP stood out with $20.3 million in inflows, followed by Hyperliquid with $10.8 million and Near with $7.6 million.
| Asset | Weekly flow |
|---|---|
| Bitcoin | $1.44 billion outflow |
| Ether | $257.3 million outflow |
| XRP | $20.3 million inflow |
| Hyperliquid | $10.8 million inflow |
| Near | $7.6 million inflow |
US dominates regional outflows
By country, the United States was the main source of last week’s outflows. US-based withdrawals reached $1.63 billion, aligning with SoSoValue data that showed $1.42 billion in outflows from US spot Bitcoin ETFs. Germany saw $25.7 million in outflows, Sweden $6.6 million, and Hong Kong $4.5 million. Only the Netherlands recorded positive net flows above $1 million, with a $1.3 million inflow.
| Country | Weekly flow |
|---|---|
| United States | $1.63 billion outflow |
| Germany | $25.7 million outflow |
| Sweden | $6.6 million outflow |
| Hong Kong | $4.5 million outflow |
| Netherlands | $1.3 million inflow |
Weaker demand fuels selling pressure
According to Laser Digital’s derivatives trading desk, last week’s crypto sell-off happened without a single clear trigger, and lackluster equity markets played a role. The firm, highlighting a lack of demand, noted that Michael Saylor’s company Strategy did not purchase any Bitcoin between May 18 and May 24. Strategy, previously known as MicroStrategy, is a US-based company noted for holding large quantities of Bitcoin on its balance sheet.
The Laser Digital trading desk observed that with STRC shares still trading below their nominal value and retail investor interest weak, Bitcoin is expected to remain under short-term pressure.
