Digital Asset Investment Products Record Initial Weekly Withdrawals in Five Weeks as Geopolitical and Economic Concerns Mount
Investment products focused on digital assets experienced withdrawals totaling $414 million during the previous week, driven by concerns over inflation, anticipated Federal Reserve interest rate increases, and escalating geopolitical tensions in the Middle East that prompted investors to adopt a more cautious approach.
Investment vehicles tied to cryptocurrency witnessed their initial weekly capital outflows across a five-week period last week, as $414 million departed from the market while investors adopted a more cautious stance amid growing concerns about inflation pressures and intensifying geopolitical conflicts in the Middle East region.
The withdrawal trend emerged as market expectations surrounding the upcoming June Federal Open Market Committee (FOMC) meeting in the US transformed from anticipating potential rate cuts to expecting rate hikes instead, indicating a more challenging macroeconomic environment for risk-oriented assets, according to a Monday report from CoinShares.
The total value of assets under management declined to $129 billion, retreating to levels previously observed in early February and "broadly comparable to April 2025, during the initial phase of Trump's tariffs," according to James Butterfill, CoinShares head of research.
The change in flow direction indicates a transition toward risk-off sentiment among market participants, with macroeconomic concerns influencing investor decision-making and applying downward pressure on appetite for digital assets.
Ether leads outflows
Ether (ETH) experienced the most significant declines among major digital assets, registering $222 million in capital withdrawals, which brought its year-to-date (YTD) flows to a net deficit of $273 million, representing the poorest performance among all tracked assets.
Bitcoin (BTC) similarly registered $194 million in capital withdrawals throughout the week, though it maintains a positive position for the year overall, with $964 million in net capital inflows. Short-Bitcoin investment products attracted an additional $4 million in inflows, indicating that certain investors are taking positions in anticipation of further price declines.
Solana (SOL) came next with $12.3 million in capital withdrawals, whereas XRP (XRP) distinguished itself as among the limited number of assets to draw new investment capital, recording $15.8 million in inflows.
Spot Bitcoin, Ether ETFs see weekly outflows
Indications of risk-off sentiment are additionally becoming visible in cryptocurrency exchange-traded funds. During the previous week, spot Bitcoin ETFs broke a four-week consecutive inflow pattern and registered $296 million in net capital outflows last week, which came after more than $2.2 billion in inflows recorded earlier during the month.
Spot Ether ETFs similarly continued their downward trend, posting $206.6 million in outflows for a consecutive second week.