Crypto Products Recorded Net Outflow of $1.7B Last Week

Core Insights - Crypto investment products experienced significant outflows, totaling $1.7 billion last week, bringing year-to-date net outflows to $1 billion [1] - The total assets under management (AUM) for crypto investment products have decreased by $73 billion from their peak in October 2025 [1] Outflows Analysis - Outflows were predominantly from the United States, which accounted for $1.65 billion of the total withdrawals [2] - Bitcoin investment vehicles saw $1.32 billion in outflows, with US-based spot Bitcoin ETFs being the main contributors at $1.48 billion [3] Bitcoin Market Dynamics - Bitcoin is currently trading below the average cost basis of US spot Bitcoin ETFs, which is approximately $87,830 per Bitcoin [4] - US Bitcoin ETF products hold around 1.28 million BTC with a total AUM of about $113 billion [3] Altcoin Performance - The total crypto market cap declined by $400 billion over the past week, with Ethereum products facing $308 million in outflows [5] - Other altcoins like XRP and Solana also experienced outflows, with XRP products losing $43.7 million and Solana products losing $31.7 million [5] Inflows and Market Sentiment - Short Bitcoin products recorded inflows of $14.5 million, with their AUM increasing by 8.1% year to date [6] - The Crypto Fear and Greed Index has dropped into extreme fear, indicating a bearish market sentiment [6] Macro Economic Factors - The ongoing selloff is attributed to a shortage of US liquidity rather than structural market issues, as noted by Raoul Pal [6] - Temporary liquidity drains are linked to two government shutdowns and issues in US funding markets [7] - Market participants anticipate fewer and slower interest rate cuts under the new Fed chair Kevin Warsh due to a firm stance on inflation [7]