Digital Asset Funds See $454M Weekly Outflows As Fed Rate-Cut Hopes Fade: Coinshares

What Happened

Digital asset investment products recorded $454 million in net outflows last week extending a sharp reversal in investor sentiment that has largely erased gains made at the start of the year, according to CoinShares.

Investor optimism at the start of the year had been underpinned by hopes that the Federal Reserve would begin easing monetary policy early in 2026.

However stronger-than-expected economic indicators and firm labour market data have tempered those expectations prompting risk-off behaviour across digital asset investment products.

Germany led inflows with $58.9 million, followed by Canada at $24.5 million and Switzerland at $21 million, highlighting a notable divergence between US and European investor behaviour.

At the asset level, Bitcoin experienced the largest outflows shedding $405 million over the week. Interestingly, short-Bitcoin products also saw $9.2 million in outflows suggesting mixed conviction among bearish investors rather than a clear directional bet against the asset.

Despite the broader risk-off tone some assets continued to draw investor interest. XRP led inflows with $45.8 million, followed by Solana at $32.8 million and Sui at $7.6 million.

These inflows point to selective positioning rather than a wholesale retreat from the market, as investors rotate into assets perceived to have stronger near-term catalysts or relative resilience amid macro uncertainty.

Market Context

The pullback follows a four-day streak of outflows totalling $1.3 billion which has nearly wiped out the $1.5 billion of inflows recorded during the first two trading days of 2026.

The abrupt shift appears closely tied to cooling expectations of a US Federal Reserve interest rate cut in March after recent macroeconomic data suggested inflation may remain more persistent than markets had anticipated.

As a result much of the capital that flowed into crypto products during early January has already exited the market, underscoring how sensitive digital assets remain to shifts in macroeconomic outlooks.

CoinShares reports regionally the United States accounted for the vast majority of last week’s outflows, with US-listed products seeing $569 million withdrawn. This contrasted sharply with sentiment elsewhere, as several non-US markets continued to attract capital.

Ethereum followed with $116 million in outflows, reflecting broader caution toward large-cap digital assets. Multi-asset products recorded $21 million in withdrawals while smaller outflows were seen from Binance- and Aave-linked products, totalling $3.7 million and $1.7 million, respectively.

Select Altcoins Attract Fresh Capital

Why It Matters

Rate Cut Doubts Weigh on Early-Year Momentum

US Dominates Regional Outflows

Details

Bitcoin and Ethereum Lead Asset-Level Withdrawals

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