US leads $560 million crypto outflow wave as investors weigh trade tariff and inflation concerns.
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Global crypto investment products experienced a second straight week of capital outflows, with investors pulling $508 million amid growing economic concerns, according to CoinShares' latest weekly report.
Over the past two weeks, total outflows have reached $924 million. This downturn follows an 18-week period of inflows amounting to $29 billion following Donald Trump's election victory in November 2024.
James Butterfill, head of research at CoinShares, attributed the outflow trend to investor concerns over the US government's approach to trade tariffs, inflation, and monetary policy. He noted that the market is showing signs of hesitation as traders assess the potential impact of these factors on the global financial landscape.
According to him, investor caution is evident in trading volumes, which have dropped sharply. Weekly trading volume fell from $22 billion two weeks ago to $13 billion last week, reflecting a more risk-averse market sentiment.
Bitcoin bore the brunt of last week's outflows, with investors withdrawing $571 million.
However, short-Bitcoin products saw inflows of $2.8 million, suggesting that traders are hedging against potential downside risks amid ongoing market uncertainty.
The US dominated the outflows, recording a staggering $560 million in capital flight. This is evidenced by the fact that major US-based fund issuers, including Grayscale, Fidelity, Ark 21Shares, and Bitwise, experienced significant outflows, each exceeding $100 million, respectively.
While the US struggled with investor sentiment, European markets saw continued inflows. Germany and Switzerland attracted $30.5 million and $15.8 million, respectively, signaling a divergence in regional investor behavior.
Similarly, other regions, such as Hong Kong, Canada, and Brazil, saw minor outflows of under $3 million each.
While Bitcoin faced selling pressure, XRP recorded the highest inflows among altcoins, attracting $38.3 million last week.
Since mid-November 2024, XRP inflows have totaled $819 million, highlighting continued investor interest.
Butterfill stated that the surge in capital follows speculation that the US Securities and Exchange Commission (SEC) may drop its lawsuit against Ripple.
Additionally, optimism is growing around the potential approval of a spot XRP ETF in the US, fueling further investor interest.
Meanwhile, other major altcoins also saw capital inflows. Solana added $8.9 million, Ethereum received $3.7 million, and Sui recorded $1.47 million.
