Crypto Investment Products Bleed $1.7B In Second Week Of Outflows, Ytd Turns Red

What Happened

Digital asset investment products recorded a second straight week of heavy outflows, shedding a combined $1.7 billion as investor sentiment toward the sector continued to deteriorate.

Since peaking in October 2025, total assets under management across crypto investment products have fallen by roughly $73 billion, highlighting the scale of the pullback.

Hype-focused investment products also attracted $15.5 million in inflows, benefiting from a recent surge in on-chain activity tied to tokenized precious metals.

Despite the drawdown, Thorn said institutional investors appear to be holding their positions better than the price action might suggest.

Market Context

The renewed selling comes as markets adjust to a more hawkish U.S. Federal Reserve outlook, ongoing large-holder distribution linked to the four-year crypto cycle, and rising geopolitical uncertainty.

Notably, Bitcoin is currently trading below the average cost basis of US spot Bitcoin ETFs after the products recorded their second- and third-largest weekly outflows on record last month, according to research from Alex Thorn, head of research at Galaxy.

That puts the average purchase price for ETF-held Bitcoin at approximately $87,830 per coin, well above current market levels.

Why It Matters

One exception was short Bitcoin products, which recorded $14.5 million in inflows and have seen assets under management rise 8.1% year to date, suggesting growing demand for downside protection.

Details

Key Takeaways:

Crypto funds lost $1.7 billion in a week, pushing year-to-date flows into the red.

US-led outflows hit major assets as fund assets fell $73 billion from peak.

Short Bitcoin saw inflows while spot ETF buyers sit underwater on average.

The latest withdrawals have fully reversed year-to-date inflows, pushing net global flows to a $1 billion outflow, according to a recent report from CoinShares.

Crypto Fund Assets Drop $73B Since Peak as US Leads Outflows

Regionally, the United States accounted for the vast majority of the outflows, with $1.65 billion exiting U.S.-listed products over the past week.

Canada and Sweden also recorded notable withdrawals of $37.3 million and $18.9 million, respectively.

In contrast, sentiment in parts of Europe was slightly more resilient, with Switzerland and Germany posting modest inflows of $11 million and $4.3 million.

Outflows were broad-based across major assets. Bitcoin products led the decline, losing $1.32 billion, while Ethereum saw $308 million withdrawn.

Tokens that had attracted strong interest earlier in the cycle were not spared, with XRP and Solana products posting outflows of $43.7 million and $31.7 million, respectively.

US spot Bitcoin ETFs now manage roughly $113 billion in assets and collectively hold about 1.28 million BTC.

“This means the average Bitcoin ETF purchase is underwater,” Thorn said in a post shared alongside the data.

Crypto ETF Outflows Accelerate

Outflows have accelerated in recent weeks. The 11 US spot Bitcoin ETFs recorded roughly $2.8 billion in net redemptions over the past two weeks, including $1.49 billion last week and $1.32 billion the week prior, according to Coinglass.

The sustained withdrawals mark a sharp reversal from the strong inflows seen late last year.