Crypto ETFs Bleed $7.2 Billion Since February as Market Turns Cautious
The crypto investment landscape is experiencing a sharp reversal, with digital asset funds seeing outflows totaling $7.2 billion since February, according to a report by CoinShares. Last week alone, investors pulled out $795 million from crypto-related products—nearly erasing the net inflows accumulated earlier this year, which now stand at just $165 million.
Bitcoin has been hit the hardest, accounting for $751 million of the recent outflows. Ethereum and alternative coins like Solana and Aave have also recorded significant withdrawals, underscoring the bearish sentiment across the broader market. Even leveraged crypto instruments, typically favored during bullish phases, have seen declining interest.
James Butterfill, head of research at CoinShares, attributes the downturn to escalating geopolitical tensions and recent economic moves by U.S. President Donald Trump—specifically, the implementation of a sweeping 10% global tariff. These developments have injected fresh uncertainty into the market, shaking investor confidence and prompting a risk-off approach.
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One of the biggest names in crypto ETFs, BlackRock, hasn't been immune. Its flagship iShares crypto funds reported $342 million in weekly outflows. Overall, the firm’s digital asset ETF inflows have plunged 83% this quarter, despite steady asset performance.
Still, not everyone is backing away. Some institutional players are doubling down. Andrew Kang of Mechanism Capital recently increased his Bitcoin holdings with a bold $200 million long position. Others, like Bitwise CIO Matt Hougan, believe current market turbulence may pave the way for stronger blockchain adoption in the long term.
While a significant shift in investor sentiment is clearly underway, whether this signals a lasting downturn or a buying opportunity remains to be seen. After 19 straight weeks of inflows, crypto ETPs now face a new reality—uncertain, volatile, but possibly ripe for strategic entry.
