Crypto asset investment products faced another week of outflows last week, marking the second consecutive week of investor pullback. According to the latest weekly report released by CoinShares, total outflows amounted to $584 million, pushing the two-week outflow total to roughly $1.2 billion.
This shift highlights a cautious sentiment among investors, particularly in light of macroeconomic factors. CoinShares’ Head of Research, James Butterfill, linked the trend to ongoing uncertainty about interest rate policy in the US.
The report also noted a significant drop in market participation, with exchange-traded products (ETPs) globally recording just $6.9 billion in traded volume for the week — the lowest since US spot Bitcoin ETFs launched in January.
Bitcoin Leads Outflows While Altcoins Show Pockets of Strength
The United States saw the highest fund exits with $475 million in outflows, followed by Canada with $109 million. Germany and Hong Kong also registered $24 million and $19 million in respective outflows. In contrast, Switzerland and Brazil stood out as exceptions, recording inflows of $39 million and $48.5 million.
Bitcoin remained at the center of the movement, accounting for $630 million in weekly outflows. However, sentiment did not shift heavily toward bearish bets, as short Bitcoin products also saw minor outflows totaling $1.2 million, suggesting a lack of conviction in downside positioning.
Ethereum also experienced $58 million in outflows, reflecting broader risk aversion. However, several altcoins bucked the trend, with Solana, Litecoin, and Polygon witnessing modest inflows of $2.7 million, $1.3 million, and $1 million respectively.
These movements indicate that some investors may be seeking exposure to alternative assets amid price corrections. Multi-asset products stood out as a contrasting trend, attracting $98 million in inflows.
This may suggest that investors are diversifying their portfolios or taking advantage of recent altcoin weaknesses to allocate across multiple assets.
Investor Behavior Shaped by Macro Sentiment
CoinShares’ data reflects a market environment still heavily influenced by macroeconomic outlooks and central bank policy expectations. With investor anticipation for interest rate cuts declining, digital asset fund flows have turned negative after months of consistent inflows earlier this year. James Butterfill noted:
We believe this is in reaction to the pessimism amongst investors for the prospect of interest rate cuts by the FED this year.
Notably. the decrease in ETP trading volume could also reflect a broader lull in investor engagement as markets wait for further direction.
While Bitcoin and Ethereum were the primary drivers of the recent outflows, the inflows into certain altcoins and multi-asset products point to nuanced sentiment rather than broad-based risk-off behavior.
Featured image created with DALL-E, Chart from TradingView