Crypto asset investment products faced another week of outflows last week

This shift highlights a cautious sentiment among investors, particularly in light of macroeconomic factors.

Crypto asset investment products faced another week of outflows, continuing the trend from the previous week with investors pulling back from markets. The latest weekly report by CoinShares, released on Monday, revealed outflows totaling $584 million.

This marks the second consecutive week of outflows and follows a three-week streak of inflows that began in March. Together, the two weeks of outflows push the two-week total to roughly $1.2 billion.

The trend highlights a cautious sentiment among investors, particularly in response to macroeconomic factors. CoinShares’ Head of Research, James Butterfill, linked the trend to ongoing uncertainty about interest rate policy in the US.

"We believe this is in reaction to the pessimism amongst investors for the prospect of interest rate cuts by the FED this year," Butterfill stated.

The report also noted a significant drop in market participation, with exchange-traded products (ETPs) globally recording just $6.9 billion in traded volume for the week—the lowest since U.S. spot Bitcoin ETFs launched in January.

The decrease in ETP trading volume could also be linked to the lack of progress in the U.S. Bitcoin ETF application space this year.

Bitcoin Leads Outflows While Altcoins Show Pockets of Strength

The United States saw the highest fund exits with $475 million in outflows, followed by Canada with $109 million. Germany and Hong Kong also registered $24 million and $19 million in respective outflows.

In contrast, Switzerland and Brazil stood out as exceptions, recording inflows of $39 million and $48.5 million.

Bitcoin remained at the center of the movement, accounting for $630 million in weekly outflows. However, sentiment did not shift heavily toward bearish bets, as short Bitcoin products also saw minor outflows totaling $1.2 million, suggesting a lack of conviction in downside positioning.

Ethereum also experienced $58 million in outflows, reflecting broader risk aversion. However, several altcoins bucked the trend, with Solana, Litecoin, and Polygon witnessing modest inflows of $2.7 million, $1.3 million, and $1 million respectively.

These movements indicate that some investors may be seeking exposure to alternative assets amid price corrections. Multi-asset products stood out as a contrasting trend, attracting $98 million in inflows.

This may suggest that investors are diversifying their portfolios or taking advantage of recent altcoin weaknesses to allocate across multiple assets.

Investor Behavior Shaped by Macro Sentiment

CoinShares’ data reflects a market environment still heavily influenced by macroeconomic outlooks and central bank policy expectations. With investor anticipation for interest rate cuts declining, digital asset fund flows have turned negative.

This shift follows five months of consistent inflows earlier in the year, signaling a change in market behavior.

Notably, the decrease in ETP trading volume could also reflect a broader lull in investor engagement as markets wait for further direction.

While Bitcoin and Ethereum were the primary drivers of the recent outflows, the inflows into certain altcoins and multi-asset products point to nuanced sentiment rather than broad-based risk-off behavior.