Crypto Funds Defy Geopolitical Chaos: How Digital Assets Outperform Traditional Markets in 2025

While Wall Street sweats over escalating tensions in Eastern Europe and Asia, cryptocurrency funds are quietly posting their best Q2 performance since 2021.

Decoupling from traditional markets

Bitcoin and Ethereum funds gained 18% and 22% respectively last quarter—outpacing gold (3%) and the S&P 500 (5%) by a country mile. Even regulators can''t ignore these numbers, though God knows they''re trying.

The hedge fund playbook is broken

Traditional ''safe haven'' assets got crushed as crypto liquidity pools deepened. Turns out when governments freeze reserves, people want assets they can actually control—who knew?

One cynical footnote: The same banks warning clients about crypto volatility are now quietly launching blockchain ETFs. But sure, it''s definitely a bubble this time.

Recovery in Bitcoin Funds, Ethereum’s Record Inflows

Bitcoin (BTC)$107,137-based investment products significantly recovered after two weeks of minor outflows. The last week saw a net inflow of $1.3 billion into Bitcoin-based investment products, increasing the AUM to $156.7 billion. A significant part of this inflow originated from spot bitcoin exchange-traded funds (ETFs) in the United States, which alone attracted a net inflow of $1.37 billion, although small outflows in other countries slightly offset this figure. Short Bitcoin investment products also observed a small net inflow of $3.7 million.

Ethereum (ETH)$2,626-based investment products continued to perform positively. ethereum products attracted a net inflow of $585 million last week, bringing the best performance series since February to $2 billion, which accounts for approximately 14% of the total AUM of $14.9 billion. The spot Ethereum ETFs in the U.S. alone saw a net inflow of $528.2 million. However, funds experienced an outflow of $2.1 million on Friday, ending a 19-day record inflow streak.

XRP-based investment products drew their first net inflow of $11.8 million in three weeks, while Sui-based investment products saw a $3.5 million inflow.

Regional Performance of Cryptocurrency-Based Investment Products

Regionally, the United States led with a net inflow of $1.9 billion. Butterfill noted that investor sentiment was largely positive. Following the U.S., funds in Switzerland, Germany, and Canada saw net inflows of $20.7 million, $39.2 million, and $12.1 million, respectively. Meanwhile, cryptocurrency-based investment products in Hong Kong and Brazil ended the week with net outflows of $56.8 million and $8.5 million, respectively.

Market data indicates that BTC rose by 1.3% over the past week, trading around $107,000, while ETH increased by 5.4%, trading at approximately $2,628. Valentin Fournier, BRN Chief Analyst, stated, “Despite geopolitical risks, the market’s demonstrated strength is encouraging, especially with individual and algorithmic momentum investors stepping back.” However, Fournier added that uncertainty about the timing of expected interest rate cuts, slower asset purchases by central banks, and a weakening of institutional momentum in Ethereum indicate a bumpy road back to record levels.