Core Insights - Crypto investment products experienced significant outflows totaling nearly $2 billion for the third consecutive week, marking one of the largest weekly outflows on record [1][2] - The outflows are attributed to a retreat from risk amid uncertainties regarding rate cuts, thinning liquidity, and renewed selling by crypto whales [1][6] Group 1: Outflows and Market Impact - Bitcoin and Ethereum exchange-traded products (ETPs) were the hardest hit, with combined outflows exceeding $2 billion [2][3] - The U.S. accounted for 97% of the total outflows, approximately $1.97 billion, indicating a decline in institutional sentiment [4][5] - Total withdrawals over the past three weeks reached $3.2 billion, erasing nearly all inflows from early Q3, with assets under management dropping from $264 billion to $191 billion, a 27% decrease [4][6] Group 2: Investor Behavior and Market Sentiment - Investors are shifting towards multi-asset funds and increasing short-Bitcoin exposure, indicating a preference for hedging rather than accumulation [4][6] - Despite positive regulatory developments, including ETF progress, investor sentiment remains low, with large institutions and retail traders continuing to sell off Bitcoin and Ethereum positions [6][7] - Historical trends suggest that the crypto bull market typically cools 12–18 months post-halving, with many investors anticipating a late-cycle exhaustion by late 2025 [9][10] Group 3: Future Outlook - The continuation of outflows and market pressure will largely depend on external macroeconomic factors, including the timing of Federal Reserve rate cuts and overall investor confidence as the year ends [10][11]