Crypto ETPs Suffer Massive $1.7B Outflow in Fifth Consecutive Week of Losses

• Crypto ETPs see $1.7B in outflows, with Bitcoin products losing $978M this week.
• U.S. accounts for 93% of the $6.4B in crypto outflows over five consecutive weeks.
• Binance’s AuM drops to $15M after a major investor exits, causing significant losses.

Cryptocurrency exchange-traded products (ETPs) have shown substantial market downturn after demonstrating negative flows for five straight weeks. The latest report showed that $1.7 billion outflows led to an overall withdrawal of $6.4 billion during this continuous negative period. The record-breaking outflow period tracked by CoinShares since 2015 indicates a widespread crypto market downturn despite a modest increase in year-to-date inflows.

Bitcoin and BNB Bear the Brunt of Outflows

Bitcoin products, which comprise the bulk of cryptocurrency investments, saw the most substantial withdrawals. During the past week, Bitcoin ETPs faced outflows of $978 million, bringing the total for the last five weeks to $5.4 billion. Short-bitcoin position investors continued exiting their holdings, which sustained these market sell-offs. 

Source; Coinshares

Ethereum and Solana experienced capital withdrawals totaling $176 million and $2.2 million, respectively, during the same period. However, investment products linked to XRP were an exception, as it recorded a net inflow of $1.8 million,  marking one of the positive sentiments recorded amidst the market negativity.

The mass withdrawal of a major seed investor from Binance Coin (BNB) resulted in the complete depletion of all assets under management (AuM) across its products. Investor confidence in BNB has suffered heavily after the asset’s AuM fell to only $15 million. The market remains unstable after major investors withdrew their assets during these consecutive days of outflow without showing immediate signs of recovery.

U.S. Leads the Outflows; Europe Follows Suit

The United States has been the primary driver of these outflows, accounting for 93% of the total. During the previous five weeks, U.S. crypto ETP investors withdrew approximately $1.16 billion from their accounts. Investor uncertainty and market-wide pressures have caused the most recent capital movement from crypto assets. The European markets experienced substantial withdrawals totaling $528 million because one seed investor withdrew funds.

Source; Coinshares

In contrast, Germany experienced a modest inflow of $8 million as it demonstrated divergent market perspectives from its counterparts. The withdrawal of investor funds hit the U.S. and Europe most severely, but negative crypto market attitudes extended across all regions during this period of great uncertainty.

The year-to-date data shows a net inflow of $912 million despite the long period of outflow, which indicates market resilience. Total assets under management have experienced a $48 billion decline because investors pulled money from the market during an extended selling period. The cryptocurrency sector faces challenges in its uncertain market environment because institutional investors continue to withdraw their capital from market operations.