Crypto ETPs Experience $508 Million Outflow as Bitcoin Sell-Off Persists — CoinShares Report

Cryptocurrency exchange-traded products (ETPs) have faced significant outflows over the past week, continuing a trend of investor caution amid ongoing market uncertainty, according to CoinShares. Last week, crypto ETPs recorded a total of $508 million in outflows, following $415 million in outflows the previous week. This marks a persistent shift in sentiment, as investors have been pulling back from digital assets in response to various economic concerns.

Bitcoin Leads the Outflows

The largest losses were seen in Bitcoin ETPs, which experienced a staggering $571 million in outflows. As Bitcoin remains the dominant cryptocurrency by market capitalization, these withdrawals reflect broader market hesitance and the ongoing volatility in the crypto market.

In contrast, altcoin ETPs, including those for XRP, Solana (SOL), Ether (ETH), and Sui (SUI), experienced a more mixed response. XRP products, in particular, bucked the trend, recording significant inflows despite broader market pullbacks.

XRP ETPs See Notable Inflows

XRP ETPs stood out with $38 million in inflows during the past week, continuing a trend of strong investment in the asset. Since November 2024, XRP ETPs have seen a total of $819 million in inflows, largely driven by investor optimism surrounding the outcome of the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC). Market participants are hoping for a favorable ruling that could pave the way for the approval of a spot XRP ETF.

Other altcoin ETPs also saw modest inflows. Solana's investment products received $8.9 million, while Ether ETPs saw $3.7 million in inflows. Sui ETPs, while smaller in scale, still managed to attract $1.5 million.

BlackRock’s iShares ETFs See Rare Losses

In a notable development, BlackRock’s iShares exchange-traded funds (ETFs) experienced rare losses, recording $22 million in outflows. This is significant, considering BlackRock's iShares ETFs are typically among the largest and most stable products in the market.

On the other hand, ProShares, a leading provider of U.S. crypto ETPs, saw a rare positive outcome, attracting $38 million in inflows. This was a notable contrast to the broader market trend, where most major crypto ETPs recorded losses.

Grayscale and Fidelity Lead the Outflows

The largest outflows among crypto ETP providers came from Grayscale Investments and Fidelity Digital Assets. Grayscale saw a significant $170 million in outflows, while Fidelity Digital Assets experienced $166 million in withdrawals. Both firms, which offer institutional-grade crypto investment products, have faced challenges as market sentiment has turned bearish.

Regional Trends: US vs Europe

Regionally, the majority of crypto ETP outflows were seen in the United States, which accounted for $560 million of the total outflows. This reflects a broader trend of investor caution in the U.S., driven by factors such as trade tariffs, inflation concerns, and uncertainties surrounding U.S. monetary policy following the presidential inauguration.

In contrast, Europe demonstrated a more resilient market, with steady inflows into crypto ETPs. Germany and Switzerland were the leading contributors, with inflows of $30.5 million and $15.8 million, respectively. This suggests that European investors remain relatively optimistic about the potential of digital assets despite the global market downturn.

Conclusion

Crypto ETPs continue to face significant headwinds as investor sentiment remains cautious, particularly in the wake of Bitcoin’s ongoing sell-off. Bitcoin ETPs saw the largest outflows, while XRP and other altcoin funds managed to attract inflows, reflecting the complex and shifting landscape of digital asset investment. As market uncertainty persists and the regulatory environment evolves, the flow of capital into and out of crypto ETPs will likely remain volatile in the coming weeks.