Crypto ETPs Post $1.07B Outflow Amid Iran Tensions, Inflation

Cryptocurrency exchange-traded products recorded $1.07 billion in net outflows last week, ending a six-week streak of inflows and marking the third-largest weekly withdrawal so far this year, according to CoinShares. The report covers flows during the most recent weekly reporting period.

Bitcoin investment products accounted for the largest share of redemptions, with $982 million pulled from funds. Ether products saw $249 million in outflows, the biggest weekly withdrawal for Ether since the week ending Jan. 30. Despite the outflows, both Bitcoin and Ether ETPs remain positive on a year-to-date basis.

Some alternative-coin funds saw inflows. XRP investment products drew $67.5 million, and Solana funds added $55.1 million. CoinShares linked these inflows to improving regulatory sentiment in the United States after movement on federal legislation.

Most of the selling came from U.S. investors, who withdrew a net $1.14 billion from crypto funds. Several European markets, including Switzerland, Germany and the Netherlands, posted modest inflows over the same period.

The outflows occurred alongside a broader pullback in risk assets. The S&P 500 retreated from recent highs late in the week as investors focused on disruptions around the Strait of Hormuz, a key shipping route for global oil shipments. Those disruptions pushed energy prices higher and coincided with a rise in U.S. consumer inflation to its highest level in more than three years.

Regulatory developments also affected flows. The CLARITY Act, legislation aimed at creating a clearer framework for digital-asset regulation, advanced out of the Senate Banking Committee with bipartisan support last week. James Butterfill, head of research at CoinShares, attributed the selective altcoin inflows to improving regulatory sentiment following progress on the bill.

Ji Hun Kim, CEO of the Crypto Council for Innovation, said, “the momentum and progress are both strong” as the bill moves through Congress. Republican Senator Thom Tillis called for additional revisions and said, “more work remains in the weeks ahead to make this legislation even better.”