Crypto investment products have now recorded five straight weeks of outflows as investors remain cautious given prevailing market turbulence.
According to a Monday report from CoinShares, crypto investment products outflow reached $1.7 billion last week, bringing the total capital flight over the past 17 days to $6.4 billion—the longest outflow streak since CoinShares began tracking the data in 2015.
The recent exodus has been primarily driven by Bitcoin and Ethereum spot exchange-traded funds (ETFs) in the U.S., which have been struggling to attract new inflows. Bitcoin investment products alone recorded $1.28 billion in outflows, while Ethereum-based funds lost $166 million.
However, despite the current downturn, crypto investment products still maintain a positive net inflow year-to-date. Since January 1, digital asset funds have accumulated a net inflow of $912 million, thanks to a strong start to the year that has helped cushion recent losses.
BTC and ETH lead crypto investment products outflow, but XRP sees renewed interest.
Bitcoin remains at the center of the ongoing sell-off despite regaining brief momentum amid softer U.S. inflation data in February, with its investment products experiencing $978 million in outflows last week. This brings its total outflows for March to $1.73 billion.
Ethereum is also feeling the pressure, with its investment products seeing $176 million in outflows last week and $265 million for the month. Despite this, spot ETH ETFs still have a net inflow of $421 million since the start of the year, indicating that investor sentiment remains mixed. While Solana-based investment products also recorded outflows to the tune of $2.2 million last week, their total inflows in March has reached $14.2 million per the report.
On the other hand, XRP investment products appear to be defying the broader trend. Unlike BTC and ETH, XRP-based products saw $1.8 million in net inflows last week, pushing their total monthly inflow to $7.4 million. As reported by Nitadel, Virtune XRP ETP has surpassed $110M assets under management amid growing market demand.
The growing interest in XRP could be linked to speculation surrounding the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC), with investors betting on a favourable resolution.
Related: Ripple’s 200M XRP transfer sparks speculation amid SEC case developments.
Regional outflows and Binance’s AUM decline.
Breaking down the outflows by region, the United States led the charge, with investors pulling $1.16 billion from crypto funds last week. Since the start of March, U.S. crypto investors have withdrawn a staggering $2.08 billion.
However, the country still holds a positive $787 million year-to-date inflow, suggesting that earlier gains continue to outweigh recent losses. Recall that President Donald Trump has established a strategic bitcoin reserve and U.S. digital assets stockpile, naming BTC, ETH, SOO, ADA and XRP as part of the U.S. strategic crypto reserve.
Other regions that saw net outflows include Switzerland ($528 million), Sweden ($5.1 million) and Canada ($6.6 million). Meanwhile, some countries saw positive inflows, including Germany ($8 million), Brazil ($4.2 million) and Australia ($1.6 million). Interestingly, Russia is turning to cryptocurrencies for its oil trades to evade western sanctions.
One of the more concerning trends highlighted in the report was the sharp decline in Binance’s assets under management (AUM). Binance’s AUM dropped to just $15 million last week, with CoinShares attributing the decline to an exit by a seed investor in a crypto fund tied to Binance.
Read also: Binance to delist 9 stablecoins, including USDT in Europe to comply with MiCA regulations.
The persistent outflows from crypto investment products highlight a cautious sentiment among investors, with BTC and ETH products seeing heavy losses.
However, XRP’s impressive performance, driven by speculation surrounding its legal battle with the SEC, suggests that some investors are still bullish on the Ripple-backed crypto asset.
While digital asset products maintained a positive net inflow of $912 million in 2024, the market’s next moves will determine whether this is a temporary correction or a sign of deeper shifts in investor sentiment.
At press time, BTC is trading around $81,000, ETH has nosedived below $1,900 while XRP is changing hands at $2.2.
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