Crypto Funds See $1.17B in Outflows as Market Volatility and Rate Uncertainty Persist

Core Insights - Institutional appetite for crypto assets has weakened, with digital asset investment products recording $1.17 billion in outflows, marking a second consecutive week of losses amid market volatility and macroeconomic uncertainty [1][9] Fund Flow Data - Trading volumes in exchange-traded products (ETPs) remained high at $43 billion, but investor sentiment is fragile following the liquidity cascade on October 10 [3] - A midweek rebound on optimism regarding a potential U.S. government shutdown resolution quickly faded, leading to further withdrawals by Friday [3] Market Performance - The U.S. market accounted for the majority of losses, with $1.22 billion in outflows, while Germany and Switzerland recorded inflows of $41.3 million and $49.7 million, respectively [4] - Bitcoin experienced significant redemptions, suffering $932 million in outflows, while Ethereum saw outflows of $438 million [4][9] Emerging Trends - Short Bitcoin ETPs saw inflows of $11.8 million, marking their strongest week since May 2025 [5] - Select altcoins showed resilience, with Solana leading inflows at $118 million, totaling $2.1 billion over nine weeks [5] - Other gainers included HBAR with $26.8 million and Hyperliquid with $4.2 million, indicating ongoing investor interest in emerging blockchain ecosystems [6] Redemption Details - U.S. spot Bitcoin ETFs experienced massive redemptions, with $1.22 billion in net outflows, marking the third-largest weekly withdrawal on record [6] - Friday alone accounted for $558.4 million in outflows, the largest single-day loss since August, while Ethereum ETFs lost $508 million [7] Price Movements - Despite institutional outflows, Bitcoin's price climbed 4.4%, briefly surpassing $106,000, suggesting resilience in retail activity and spot demand [7][9] Market Sentiment - Factors such as inflation fears, central bank rate hikes, and geopolitical risks have contributed to risk aversion across markets [8]