Last week, the crypto market experienced a significant downturn, with outflows reaching a record $2.9 billion, according to CoinShares’ latest report. This marked the third consecutive week of capital exiting digital asset investment products, totaling $3.8 billion. The Head of Research at CoinShares, James Butterfill, attributed the downturn to a recent security breach at Bybit and a more assertive stance from the US Federal Reserve, leading to weakened investor confidence and capital withdrawals. Investors also took profits following a 19-week inflow streak of $29 billion.
Specifically, US-based Bitcoin products saw the largest outflows, with investors pulling $2.87 billion from funds. Major spot Bitcoin ETF issuers, such as BlackRock, Fidelity, and Grayscale, faced significant withdrawals. Other firms, including Bitwise and 21Shares, also experienced outflows, with Switzerland and Canada seeing net outflows as well. However, Germany attracted $55.3 million in capital as investors maintained a bullish outlook. Bitcoin’s decline to a three-month low below $80,000 led to a modest rise in short Bitcoin product inflows, reaching $2.3 million.
In addition to Bitcoin, Ethereum, the second-largest digital asset by market capitalization, experienced record weekly outflows of $300 million. Investment products in other digital assets, such as TON and Solana, also saw outflows. Blockchain equities ETPs were not immune to the negative sentiment, with $25.3 million in outflows. Despite the widespread sell-off, some assets attracted fresh capital, with Sui leading inflows at $15.5 million and XRP following with a $5 million inflow.
Despite the overall bearish market trends, Sui and XRP managed to attract new capital, defying market trends. Sui led inflows with $15.5 million, while XRP followed with a $5 million inflow. The speculation over a potential US spot XRP ETF and the belief that XRP is well-positioned for regulatory clarity under the Donald Trump administration contributed to the inflows. Overall, the crypto market faced significant outflows last week, with various factors contributing to the downturn, including security breaches, regulatory concerns, and profit-taking by investors.
