Crypto Investment Products Bleed $1.7B in Second Week of Outflows—YTD Turns Red as Sentiment Sours
Crypto's institutional facade cracks under pressure.
The great unwind accelerates
Digital asset investment vehicles just hemorrhaged another $1.7 billion. That marks two brutal weeks of consecutive outflows, officially dragging the year-to-date total into negative territory. The mood in regulated crypto corridors has shifted from cautious optimism to outright risk-off.
Where's the smart money going?
It's not just a broad-based retreat—capital is fleeing specific products. The usual suspects, the big, liquid exchange-traded offerings, are taking the heaviest hits. This isn't retail panic; it's institutional portfolio managers hitting the sell button, rebalancing away from perceived crypto volatility as traditional macro winds shift.
A reality check for paper promises
The outflows expose a fragile link in the crypto adoption narrative. For all the talk of 'institutional infrastructure,' these products live and die by flows. When sentiment sours, the capital proves flighty—a stark reminder that Wall Street's embrace comes with conditions and quick triggers. It’s the age-old finance dance: they’ll pay for the exposure, but never for the downside.
The red ink tells a clear story: the easy, speculative inflow is over. What remains is the messy, volatile business of building real value.
Crypto Fund Assets Drop $73B Since Peak as US Leads Outflows
Since peaking in October 2025, total assets under management across crypto investment products have fallen by roughly $73 billion, highlighting the scale of the pullback.
Regionally, the United States accounted for the vast majority of the outflows, with $1.65 billion exiting U.S.-listed products over the past week.
Canada and Sweden also recorded notable withdrawals of $37.3 million and $18.9 million, respectively.
In contrast, sentiment in parts of Europe was slightly more resilient, with Switzerland and Germany posting modest inflows of $11 million and $4.3 million.
Outflows were broad-based across major assets. Bitcoin products led the decline, losing $1.32 billion, while ethereum saw $308 million withdrawn.
Tokens that had attracted strong interest earlier in the cycle were not spared, with XRP and solana products posting outflows of $43.7 million and $31.7 million, respectively.
One exception was short bitcoin products, which recorded $14.5 million in inflows and have seen assets under management rise 8.1% year to date, suggesting growing demand for downside protection.
Hype-focused investment products also attracted $15.5 million in inflows, benefiting from a recent surge in on-chain activity tied to tokenized precious metals.
Notably, Bitcoin is currently trading below the average cost basis of US spot Bitcoin ETFs after the products recorded their second- and third-largest weekly outflows on record last month, according to research from Alex Thorn, head of research at Galaxy.
Bitcoin has fallen below the average cost basis of US spot Bitcoin ETFs, leaving the typical ETF buyer underwater.#Bitcoin #ETFshttps://t.co/S0drvztxlH
US spot Bitcoin ETFs now manage roughly $113 billion in assets and collectively hold about 1.28 million BTC.
That puts the average purchase price for ETF-held Bitcoin at approximately $87,830 per coin, well above current market levels.
“This means the average Bitcoin ETF purchase is underwater,” Thorn said in a post shared alongside the data.
Crypto ETF Outflows Accelerate
Outflows have accelerated in recent weeks. The 11 US spot Bitcoin ETFs recorded roughly $2.8 billion in net redemptions over the past two weeks, including $1.49 billion last week and $1.32 billion the week prior, according to Coinglass.
The sustained withdrawals mark a sharp reversal from the strong inflows seen late last year.
Despite the drawdown, Thorn said institutional investors appear to be holding their positions better than the price action might suggest.
Total assets under management for spot Bitcoin ETFs have fallen about 31.5% from their October peak of roughly $165 billion, while Bitcoin’s price is down close to 40% over the same period.
Cumulative ETF inflows, however, are only about 12% below their peak, indicating limited outright capitulation by longer-term holders.
