Digital asset products see billions in outflows amid volatility

Summary

• Digital asset investment products saw $2 billion in weekly outflows, totaling $3.2 billion over three weeks, with the U.S. leading the losses.
• Bitcoin and Ethereum products suffered the largest withdrawals, while multi-asset funds attracted $69 million in inflows as investors sought diversification.
• Analysts cite weak market momentum, declining ETF interest, and monetary policy uncertainty, with the next shift hinging on Federal Reserve decisions.

Digital asset investment products recorded $2 billion in outflows last week, marking the heaviest weekly withdrawals since February, according to industry data. The outflows extended a three-week decline to $3.2 billion, driven by monetary policy uncertainty and selling pressure from large cryptocurrency holders.

Bitcoin (BTC) and Ethereum (ETH) products experienced the largest withdrawals, while multi-asset funds attracted modest inflows during the period, the data showed.

The withdrawals followed sharp price declines across major cryptocurrencies, which pushed total assets under management in digital asset exchange-traded products down 27% from an early-October peak of $264 billion to $191 billion.

The United States accounted for the majority of outflows, with $1.97 billion exiting U.S.-based products. Switzerland recorded $39.9 million in outflows and Hong Kong saw $12.3 million leave the market. Germany recorded $13.2 million in inflows, representing the only major market to attract capital during the period.

Bitcoin products recorded $1.38 billion in withdrawals last week, bringing three-week outflows to approximately 2% of total Bitcoin ETP assets under management. Ethereum products saw $689 million in outflows, representing 4% of its ETP market. Solana and XRP products recorded smaller withdrawals of $8.3 million and $15.5 million, respectively.

Multi-asset investment products attracted $69 million in inflows over the three-week period as investors sought diversification strategies. Short-Bitcoin ETPs also recorded increased interest as traders adopted defensive positions during the market correction.

U.S. spot Bitcoin ETFs recorded their third consecutive week of losses, with $1.1 billion in net outflows representing the fourth-largest weekly withdrawal on record. The outflows coincided with a nearly 10% decline in Bitcoin prices, raising questions about institutional demand for the products.

According to Matrixport, the downturn reflects weakening market momentum, declining ETF inflows, and reduced exposure from long-term holders in an environment lacking immediate macroeconomic catalysts. The firm characterized the situation as the beginning of a “mini bear market,” stating that Bitcoin’s next major movement will likely depend on upcoming Federal Reserve policy decisions.

Spot Solana ETFs recorded $12 million in inflows on Friday, extending a streak to 13 consecutive days since launching on Oct. 29. Despite the positive ETF flows, Solana declined 15% over the week, while Ether dropped 11%, reflecting broad weakness across cryptocurrency markets.